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By John Lee.

Monaco-based Unaoil , which has been accused of widespread bribery and corruption in the Iraqi oil industry, has issued a statement claiming that it has been the victim of an extortion attempt.

The full statement from Unaoil follows:

Unaoil can confirm it has been the victim of a four-month extortion attempt by criminals.

The extortionists demanded huge sums of money from us in exchange for stolen emails and threatened that if we didn’t pay they would go to the media.

As reported in The Australian, our expert advisers have indicated to us that they believe the extortionists are at the very least involved with the media sources of the articles published by Fairfax Media and Huffington Post.

Despite being told by our company that the emails they were in possession of were stolen, Fairfax Media rushed to publish them, and we are deeply disturbed by their actions, which have had a negative impact on our business.

We deny the allegations made by Fairfax Media’s reporters. We will be vigorously defending ourselves and are exploring all legal options.

We are engaging with the UK Authorities and therefore are unable to comment in any detail at this time. We stand by our firm’s legacy and look forward to the facts of this case being properly brought to light.

Fairfax Media’s reporting is littered with sensationalist distortions and misleading correlations, even going so far as to attempt to draw a line between Unaoil and the Arab Spring.

Unaoil is an industrial company that has made significant contributions to civil society in Iraq and elsewhere, including building critical infrastructure and educating hundreds of vulnerable children. Prior to Fairfax’s reporting, we also employed many hundreds of Iraqis.

(Source: Unaoil)

(Blackmail image via Shutterstock)

BBC's File on 4 has produced a 38-minute programme on the recent allegations of corruption in the Iraqi oil industry, following the leaking of emails from Unaoil.

The Monaco-based company denies that it helped companies win contracts by corrupting politicians and government officials. 

Jane Deith has been given access to the leaked papers and reveals what they tell us about the business of oil.

Click here to hear or download the full programme.

(Source: BBC)

By Padraig O'Hannelly.

Former Oil Minister Dr. Hussain Al-Shahristani (pictured) has responded to the recent reports of alleged corruption involving Unaoil.

In an email to Expert Blogger Ahmed Mousa Jiyad, for publication on our Iraq Business News website, Dr Al-Shahristani says that he has "not known, met or communicated in any way with anybody from Unaoil or [with] Ahmad Al Jubouri."

He goes on the ask the Iraqi government to join the international investigative team, and offers his full cooperation to the investigations.

Dr Al-Shahristani's full email is shown below:

Dear Dr Ahmad Mousa Jiyad

Thank you for your thorough follow-up on the recent Huffington Post and Fairfax Media report. As you may have noticed, I responded immediately to the report publishers and made public statement that I have not known, met or communicated in any way with anybody from Unaoil or Ahmad Al Jubouri, and called on the Prime Minister, the Integrity Commission and Ministry of Oil to investigate the allegations and I demanded handover of any documents, emails or other available evidence to the competent Iraqi authorities to help them with the investigation.

I am pleased that the relevant authorities in UK, USA, France, Australia and Monaco are teaming up to uncover any wrongdoing or corruption in regard to this and I am asking the Iraqi government to join this international investigative team to obtain all documents or evidence related to Iraq.

I hope you will continue to follow-up this case eagerly, as you have been on other matters concerning oil contracts in Iraq, and make any new findings available to the widest possible circles as we all owe it to the Iraqi people to inform them truthfully and responsibly about any mishandling of their public funds.

I offer my full cooperation to identify and bring to justice any individual regardless of his position, and to recover any misappropriated public funds.

Best regards,
Hussain Al-Shahristani

By Ahmed Mousa Jiyad.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Unaoil Corruption Scandal: International and Iraq update and follow-up

The recent joint report by Australia's Fairfax Media and the Huffington Post uncovering serious international corruption scandal allegedly masterminded by a Monaco based company, Unaoil, has quickly gained publicity, captured  worldwide attention and prompted formal investigations in many countries, including Iraq.

On 1 April, the headquarters of Unaoil and the homes of its executives have been raided by police in Monaco. In a statement, the Monaco government said it was helping British authorities investigate the "vast corruption scandal" revealed in recent days by Fairfax Media and The Huffington Post.

Monaco government statement said that several of the company's senior executives had been questioned between 29-30 March and their homes and headquarters searched following an urgent request from Britain's Serious Fraud Office-BSFO.

The searches and interviews were conducted in the presence of BSFO officers and the items collected during the search will be now be used by the BSFO in their investigations.

Fairfax Media revealed on Thursday, 31 March, that the British police had teamed up with the Australian Federal Police, the US Department of Justice-DoJ and the FBI to investigate the vast cache of emails on which their joint report was based.

The Monaco government said it would not release further details at this stage in case it compromised the investigation. The British, Australian and US authorities above mentioned might make some statements and provide further information on their investigation in the coming days; as more information on this scandal unfolding so we have to keep watching. The implications of such international investigations will not be confined to Unaoil, the corrupting company through deal fixing, but could implicate also a number of American, British, Australian, Dutch and Italian companies among others.

In Iraq, the development of the case has been, unusually, surprisingly and unexpectedly, very fast and substantive indeed.

By John Lee.

Prime Minister Haider al-Abaid has called for an investigation into allegations of bribery in the Iraqi oil industry.

Iraq's ambassador to the United States, Lukman Faily, has also said that al-Abadi will personally chair a new committee to review all major contracts issued by government ministries.

The moves follow reports from the Huffington Post and Australia's Fairfax Media that Monaco-based Unaoil acted as an intermediary to facilitate payments between international oil companies and government officials.

The country’s former oil minister and current education minister, Hussain al-Shahristani, urged the government to investigate everyone named in the report, including himself, and called on the Huffington Post to hand over all the documents it referenced.

Authorities in Monaco raided the Unaoil offices and the homes of its directors last week, after Britain's Serious Fraud Office (SFO) sought help in its investigation. Unaoil directors were also questioned by Monaco police.

Read our Expert Blogger, Ahmed Mousa Jiyad's analysis of the crisis.

(Source: WSJ, Huffington Post)

By John Lee.

An investigation by Fairfax Media -- publisher of The Age and The Sydney Morning Herald newspapers -- and The Huffington Post, claims that Monaco-based Unaoil has been involved in widespread bribery and corruption in the oil industry, including in Iraq, Iran and Libya.

Following examination of tens of thousands of emails, the report says that Unaoil channelled huge bribes to government officials on behalf of its clients to help win billions of dollars worth of government contracts.

In Iraq, it accuses the company, and its country manager Basil Al Jarah, of arranging bribes for clients including Rolls-Royce, Petrofac, Clyde Pumps, Weatherford, Cameron/Natco, FMC Technologies, Saipem, SBM Offshore, MAN Turbo, Rosetti Marino, ABB, The Shaw Group, Core Labs, Leighton Offshore, Weir and Hyundai.

Public officials allegedly implicated include Dr Hussain al-Shahristani, former Minister for Oil and current Minister for Education, who has denied any wrongdoing; Abdul Kareem al-Luaibi [Elaibi], former Minister for Oil; Kifah Numan, Director General of the South Oil Company (SOC); Dhia Jaffar also a Director General of the SOC and since last year a Deputy Minister for Oil in the Iraqi government; and Oday al-Quraishi (SOC).

According to the report, "Unaoil made Dhia Jaffar and Oday al-Quraishi wealthy men."

Family owned and controlled, Unaoil was founded by the Iranian-born Ata Ahsani, who left Tehran at the time of the Islamic revolution. The company says it "strenuously [denies] any wrongdoing and consider[s] the allegations to be baseless and entirely false."

The original story can be read in more detail here.

(Source: The Age)

(Corruption image via Shutterstock)

The Basra Gas Company (BGC) has awarded UnaE&C Iraq, an engineering and construction subsidiary of Unaoil Group, a contract for the Rehabilitation of West Qurna Compressor Stations CS7 and CS8 at West Qurna, Iraq.

BGC is a joint venture between state run South Gas Company (51%), Shell (44%) and Mitsubishi (5%).

The project will enable flared associated gas generated from Degassing Stations DGS7 and DGS8 in West Qurna to be collected, compressed and dehydrated prior to being sent via pipeline to the downstream gas treatment plant at North Rumaila NGL Plant for further processing.

UnaE&C’s scope of work includes project management, procurement, fabrication, installation and construction of the related works. Unaoil’s operating centres in Dubai and Basra will support the project execution at West Qurna.

Cyrus Ahsani, CEO of Unaoil Group said:

“This is an excellent opportunity for Unaoil to utilise our local capabilities and deliver this important project to the high international standards expected by BGC.”

(Source: Unaoil)

The Iraq Britain Business Council (IBBC) has just welcomed Unaoil as its latest member.

A provider of industrial oil and gas solutions, Unaoil's services include engineering and construction, workforce solutions, and repair and maintenance.

The company has been active in Iraq since 2003 and engages over 1,100 people working in and for Iraq, 75 percent of whom are Iraqi.

(Source: IBBC)

(Picture: Unaoil power plant in southern Iraq)

Iraq Business News (IBN) recently interviewed Colin Findlay, General Manager of Severn Valve Solutions and Executive Director of the Severn Glocon Group of companies, about doing business in Iraq.

IBN: Can you tell us a little about your business in Iraq?

Colin Findlay: Severn Valve Solutions was formed in 2012 and has quickly become the pre-eminent valve engineering specialist for oil and gas operators of Southern Iraq. Our technical knowledge – which draws on 50 years of OEM valve expertise and 30 years’ valve management experience, enables operators to enhance performance and safety across the entire valve population. This can significantly boost plant productivity and integrity.

We have developed a robust training capability to provide long-term vocational progression for the local workforce. And our commitment to providing engineering experience and long-term skilled jobs is enabling us to integrate well with local society.

Our engineering capabilities are coupled with important local knowledge and an established infrastructure, to ensure operations run smoothly.

IBN: What attracted you to the Iraqi market?

Colin Findlay: We view Iraq as an excellent market with plenty of scope for our services and products. Unaoil Group, a major shareholder, has extensive experience in the local content aspects of the business, such as logistics, and has facilities on the ground. This is an essential part of the Iraqi offering, as it underpins our confidence that we can provide a truly first class service.

We won’t realise significant returns in the short-term, but the market has depth and longevity. This suits our business model, which is to invest and integrate for the long-term.

IBN: What would you say are the main challenges in winning business in Iraq?

Colin Findlay: To work successfully with the International Oil Companies you have to be innovative, capable and committed. We needed to provide a high quality service right from the outset. Substantial upfront investment was required before we were contracted to any business. This commitment bore fruit, with contracts up to five years in tenure awarded.

Working with the National Oil Companies and government bodies brings a different set of challenges. Tendering is complex and decision making can be time-consuming.

Understanding the nuances of business in Iraq is the main challenge overall. However, this presents an opportunity for companies like ours who are accustomed to international trade. The territory has greatest potential for firms that understand how to operate here. New companies entering the market will quickly fail if they cannot grasp this.

IBN: What advice would you give to other companies considering entering the Iraqi market?

Colin Findlay: Iraq is open for business and has great potential. But it is not a short-term opportunity.

Commitments need to be made and taking time to understand the people and the marketplace is essential.

By John Lee.

Swiss-based Sulzer has signed an agreement to form a joint venture with the Unaoil Group to service of rotating equipment for oil and gas, and power customers in Southern Iraq.

The joint venture (JV) will operate under the name of Sulzer Rotating Equipment FZCO and will have offices in Dubai, with local operations and a branch in Southern Iraq.

The companies have already cooperated in establishing a local 1,500 m2 rotating equipment workshop on the Rumaila Concession Area.

(Source: Sulzer)