Woodside may face probe on Mauritania

Nigel Wilson
10may06

WOODSIDE Petroleum, Australia's biggest oil and gas company, is facing the possibility of an investigation into its activities in the West African country of Mauritania.

The company is believed to be the subject of a complaint to the Australian Federal Police by Christine Milne, the federal senator for the Tasmanian Greens. The complaint is understood to centre on allegations that Woodside's activities in Mauritania might have involved corrupt practices.

Woodside is the operator of a joint venture in Mauritania which has recently begun producing oil from the $US700 million ($909 million) Chinguetti development about 90km offshore from the Mauritanian capital, Nouakchott.

Chinguetti is Mauritania's first oil development with production being sold on the world market, particularly to China. Woodside and its partners are also investigating developing oil and gas fields close to Chinguetti.

In August last year Mauritania's civilian democratic government led by President Maaouiya Ould Sidi Ahmed Taya was ousted in a military coup. The junta led by Colonel Ely Ould Mohamed Vall subsequently arrested the former energy minister and alleged he had received corrupt payments emanating from countries such as Italy and Australia.

Earlier this year the junta said it was dissatisfied with amendments to production sharing contracts signed by the previous regime with the Woodside-led joint venture.

Subsequently Woodside announced it had reached an arrangement to pay the Mauritanian government $US100 million in a special bonus.

It was not clear last night whether the complaint related to Woodside's latest arrangement or to its dealings with the previous administration.

The payment of bribes or other corrupt payments by Australian corporations overseas is illegal under Australian law.

Word of the complaint emerged during a presentation by Ben Mellor, head of the London-based EITI International Secretariat. Mr Mellor has been brought to Australia by Woodside.

Woodside last night expressed bewilderment at the allegations. "We know nothing about a complaint by Senator Milne to the Australian Federal Police," a spokesman said.

The company has previously denied that it has ever been involved in illegal payments in Mauritania. It is a strong supporter of the Extractive Industries Transparency Initiative (EITI), which aims to reduce the capacity of governments in resource-rich countries to hide payments made for developments.

Woodside has always said its negotiations follow international practice and the agreements are subject to international arbitration.