August 12, 2015 / 9:20 PM / 5 years ago

UPDATE 1-Saipem probed by Milan prosecutors over Brazil contract

(Recasts; adds details, background)

MILAN, Aug 12 (Reuters) - Italian oil service company Saipem said on Wednesday that Milan prosecutors had opened a probe into alleged international corruption relating to a contract awarded in Brazil in 2011.

Saipem, 43 percent owned by Italian oil major Eni, said the proceedings centred around a contract Brazil’s Petrobras had awarded Saipem SA (France) and Saipem Do Brasil (Brazil).

It said however the group had received no notification from judicial authorities in Brazil.

In July, prosecutors in Brazil alleged former Petrobras executive Renato Duque had unfairly favored Saipem on a contract for an undersea gas pipeline for the Lula and Cernambi offshore subsalt fields.

They said Duque had accepted bribes from Saipem’s representative in exchange for favoring the company in the 2011 auction for the pipeline contract.

Saipem said it was cooperating fully with the impending investigation, adding it had launched an internal audit in June upon learning an enquiry had been opened in Brazil against a former consultant of Saipem do Brasil.

“This internal audit is still ongoing,” it said.

Saipem has had around 12 billion euros wiped from its balance sheet in the last 30 months after a corruption probe in Algeria, two profit warnings and a glum business outlook.

Earlier this year Eni, which is looking to sell down its 43 percent stake in Saipem, brought in veteran oilman Stefano Cao as chief executive to turn the contractor round. (Reporting by Stephen Jewkes; Editing by Philip Pullella and Jonathan Oatis)

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