The Prosecutor for Milan, Italy, has notified oil and gas contractor Saipem that it is investigating corruption in connection with contracts in Algeria, prompting the resignation of Saipem CEO Pietro Franco Tali and Alessandro Bernini, chief financial officer at parent company ENI.

According to Italian investigators, the alleged corruption took place up to 2009 in connection with unspecified contracts in Algeria. The investigators sent a notice of inquiry to Sapiem COO Pietro Varone, who has been suspended following the news. Saipem said Mr Tali was not subject to the Prosecutor’s investigation.

According to reports, the Italian investigation is allegedly connected with a broader inquiry into oil company Sonatrach.

In the past, Sonatrach has awarded Saipem several high value contracts in Algeria, including a US$580 million (€443 million) onshore contract for a gas pipeline awarded in June 2009, and a US$1.8 billion (€1.4 billion) onshore contract to construct natural gas treatment facilities awarded in March 2009.

It is not clear whether these contracts are under investigation.

Saipem, which has appointed board member Umberto Vergine as its new CEO, said it believed its business activities had been conducted in compliance with the law and its internal code of ethics.

It added that it has offered its full co-operation to the Milan Prosecutor’s office, and said it would conduct an internal audit, with the involvement of external consultants. It said it did not believe that the investigation would have a material effect on its results.

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