Algerian state oil firm officials go on trial

Sonatrach has had close ties with those in power. Picture: AP

Sonatrach has had close ties with those in power. Picture: AP

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THE trial finally began yesterday in the case of one of Algeria’s most notorious corruption scandals involving the state-run oil company that generates most of the country’s revenue.

In a packed courthouse with onlookers including ambassadors from Italy, the United States and Germany, prosecutors read out the charges against former head of Sonatrach, Mohammed Meziane, plus his two sons and 16 other company officials.

“Justice will be served and the press cannot replace justice,” Judge Mohamed Reggad told the court after defence lawyers argued a fair trial would be impossible because of media reports on the case.

Charges include influence peddling, inflating contract prices, money laundering and skimming off millions of dollars in bribes.

The scandal was revealed in 2009 after an investigation by the department of intelligence and security, and involved contracts with Italy’s Saipem and Germany’s Contel Funkwerk.

The state news agency said the trial centres on five contracts between Sonatrach and a local unit of German company involving monitoring equipment and electronic protection services.

Founded soon after independence from France in 1962, Sonatrach has managed much of Algeria’s wealth and has had close ties with those in power.

The scandal was seen as part of a score-settling between the intelligence agency and President Abdelaziz Bouteflika, who had close ties to the accused.

The sensitivity of the case also explains the long delays in the charges going to trial.

The scandal came to be known as Sonatrach 1 after investigators in 2010 revealed a second set of charges, this time targeting then energy minister Chakib Khelil, also a close associate of the president.

That scandal has yet to come to trial in Algeria, but Italian prosecutors have already filed charges against Italian companies involved in the case, accused of paying out more than $200 million (about £135m) in bribes to Algerian officials.

Former officials with Sonatrach have said that the company has been used as a source of funds by those in power. A former company executive has estimated that the country loses between $3 billion and $6bn annually to corruption in the oil sector alone.

Algeria’s economy, which relies almost entirely on oil and gas exports, has been shaken by the low crude oil prices in recent months.

Sonatrach is the largest Algerian and African company and the 11th largest oil consortium in the world. The company, which employs about 120,000 workers, produces 30 per cent of the gross national product of Algeria. It produces around 206 million tonnes of oil annually.

The state firm replaced its chief Abdelhamid Zerguine with vice-president for production Said Sahnoun last year.

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