Australian police investigate Iraq offshore deal with Leighton

13 February 2012

Leighton Offshore won $518m deal in October 2011

The Australian Federal Police (AFP) is investigating a $518m contract awarded to Leighton Holdings after the firm reported a possible legal contravention.

The investigation relates to the Australian construction firm’s subsidiary Leighton Offshore, which was awarded a contract to expand offshore oil export loading facilities in the south of Iraq, Leighton said in a 13 February statement.

Leighton volunteered the information about possibly illegal conduct to the AFP after becoming aware of it, chairman Stephen Johns says in the statement.

“We are co-operating fully with the AFP as they conduct an investigation into these matters,” says Johns.

“At this stage, it is not known whether there has been any wrongful or illegal conduct, or whether there will be any adverse financial consequences for Leighton,” says chief executive officer Hamish Tyrwhitt.

The Iraqi cabinet approved the award of a $518m engineering, procurement and construction (EPC) contract for an oil pipeline to Leighton last October. Leighton Offshore will build a 48-inch subsea pipeline to transport crude from storage facilities at the Al-Fao peninsula to a new floating terminal and install a 900,000 barrel-a-day (b/d) single-point mooring buoy (SPM).

The company was also awarded a $733m contract in September for the first phase of the expansion, which includes the installation of two new onshore and offshore pipelines, along with three SPMs, a central manifold and metering platform.

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