FRANCE: France Begins Formal Inquiry on Oil Executive

Publisher Name: 
New York Times

Problems increased for the French oil company Total on Thursday when Christophe de Margerie, the chief executive, was put under formal investigation by French authorities, who are looking into allegations that the company paid kickbacks to win a gas contract in Iran during the late 1990s.

A French judge, Philippe Courroye, took the step a day after Mr. de Margerie was taken into custody. On Thursday, he was transferred from a police building to the offices of Judge Courroye in central Paris for further questioning. He was later released without bail.

In a statement issued Thursday night, Total reiterated its support for Mr. de Margerie, saying that it was confident "the investigation will establish the absence of any illegal activities."

Mr. de Margerie, who was the senior vice president for the Middle East at the time that the Iran deal was signed, was elevated to the top job last month. His predecessor, Thierry Desmarest, remains as the chairman.

Mr. de Margerie would be back at work Friday morning and would be free to travel and meet with his employees as usual, said a company spokesman, Paul Floren, who said he did not yet have any estimate of how much of the chief executive's time would be taken up by the case.

Robert Castaigne, the chief financial officer, and Philippe Boisseau, an upstream operations executive, returned to work Thursday after being questioned Wednesday, Mr. Floren said.

Total is trying to win a new contract in Iran to develop another project to pipe natural gas to be liquefied for export.

Mr. Floren said that the investigation into the role of Mr. de Margerie in winning previous contracts in Iran was unrelated to that effort and that the negotiations still could take years to complete.

A decision to move forward with the project is also likely to depend on approval from governments, including the French. The United Nations Security Council imposed sanctions on Iran in December after it refused to stop enriching uranium, a step toward developing nuclear weapons.

The investigation comes after a tip from the authorities in Switzerland, who provided documents to the French, according to news reports.

Total paid commissions of as much as 26 million euros to Iranian officials to win development rights in the South Pars gas field, the French business magazine Challenges reported in October, citing a letter by a Swiss prosecutor. The payments were made from 1999 to 2003, mostly to the son of Akbar Hashemi Rafsanjani, a former president of Iran, the report in Challenges said.

Mr. de Margerie was also questioned in October by the French authorities over a program that allowed Iraq, under Saddam Hussein, to sell oil to buy civilian goods for its people, who were living under sanctions until the United States-led invasion in 2003.

Total has insisted that it abided by the rules of the United Nations oil-for-food program, which allowed Iraq to sell oil for basic supplies.

AMP Section Name:Corruption