woodside goes on defensive

Woodside goes on defensive
Liliana Molina with agencies

May 13, 2006

WOODSIDE Petroleum managing director Don Voelte said an internal investigation into a rumour of it trying to bribe officials in the West African desert country Mauritania, where it has a successful offshore oil project, found no wrongdoing.

Despite media reports this week saying the Perth-based company was being investigated by the Australian Federal Police, Mr Voelte said the company had yet to hear from the police and its own investigation found nothing out of order.

Under Australian law, it is illegal for individuals or companies to bribe international officials.

Wheat exporter AWB has come to grief over alleged payments to a company linked to Saddam Hussein's regime.

In late March, Woodside resolved a dispute with Mauritania's government over amendments to oil production licences, including an agreement to pay $US100 million ($A129 million).

The amendments were negotiated by Woodside and Mauritania's last government. The then president, Maaoya Sid Ahmed Ould Taya, has since been ousted in a bloodless coup.

The payment was announced by the former government at the time. Woodside also issued a statement to the ASX but the size of the payment was left to the junta to disclose.

"When this disagreement first came up with the Mauritanian Government we looked at all our operations since 1999 and we categorically reject any corruption charges," Mr Voelte said.

"The allegation we only found out about three days ago, two days ago. It's a great country you live in when anyone can pass rumours along. I don't know (if the police will come to talk to us) but we'll co-operate."

Woodside's partners in the former French colony include Australian companies Hardman Resources and Roc Oil, as well as British firms BG Group, Premier Oil, Dana Petroleum and Fusion Oil and Gas.

The Chinguetti project began pumping oil in February and in late March the first shipment of 950,000 barrels of oil from the field set off for China.

Mauritanian police declined to confirm which company was involved but Australian media have said the allegations implicated Woodside Petroleum, which is 34 per cent owned by Royal Dutch Shell.

According to the source, the terms of the March 30 agreement to resolve the dispute over the Chinguetti offshore oil field are still being finalised.

Woodside has interests of between 37.5 per cent and 53.8 per cent in four production sharing contracts in Mauritania, a poverty-stricken nation sitting on a budding wealth of oil and gas reserves.

The oil companies negotiated the contracts with the government of president Maaouiya Ould Taya, who was then ousted in a bloodless military coup in August 2005.

The civilian government subsequently installed by junta leader Ely Mohamed Ould Vall said certain amendments to the contracts were illegal and would cost the country millions of dollars in reduced oil revenues over the next decade.

Woodside Petroleum shares on Friday fell 37¢ to $47.20.