Text size:

  • Small
  • Normal
  • Large

Leighton fires Iraq oil export official

Leighton, the Australian construction group, has fired a top official on its oil export project in Iraq over contractual irregularities.

The Australian construction group Leighton has fired a top official on its oil export project in Iraq over contractual irregularities.

The company is building oil export infrastructure near the Iraqi port of Basra through its Leighton Offshore unit, which has become embroiled in a government investigation over alleged tendering violations.

"[The] internal review of the Iraq projects undertaken by its subsidiary, Leighton Offshore, has identified instances of failures to meet governance standards in respect of the proper documentation of contractual arrangements. As a consequence, a senior manager has been dismissed," said Leighton.

In 2010, Leighton won a contract worth US$733 million (Dh2.69 billion) to construct three moorings and lay 120 kilometres of pipeline for Iraq's South Oil Company at the Fao terminal near Basra. A year later, it secured two more contracts worth $597m for further mooring facilities, pipelines and offshore platforms.

In March, Iraq's oil ministry said it had launched an investigation into the tendering process, after suspicions that Leighton had received advance information about the bids submitted by competitors, allowing it to table the lowest price.

"We are currently examining all measures concerning the contracts signed with Leighton," Hilal Ismail, the oil ministry's inspector general, said at the time.

The Basra project is part of Iraq's effort to raise its export capacity to accommodate rising production.

Crude production surpassed 3 million barrels per day (bpd) earlier in the year, and even though ambitious targets of 12 million bpd now seem unlikely, output will continue to climb.

The first two moorings were inaugurated in February, adding about 900,000 bpd in export capacity. When both phases of the project are completed, export capacity at the Fao terminal will be boosted by 1.8 million bpd.

Iraq has no seaborne outlets other than Basra, and the Kirkuk oil terminal in the north is not connected to the southern mega-fields that account for the bulk of Iraq's output.

Leighton has a big regional footprint and in the UAE formed a joint venture with the local contractor Al Habtoor in 2007. Its projects in the Emirates include the Sorbonne University in Abu Dhabi, and the long-delayed Pearl Hotel complex at the foot of the Palm Jumeirah in Dubai.

fneuhof@thenational.ae

twitter: Follow and share our breaking business news. Follow us

iPad users can follow our twitterfeed via Flipboard - just search for Ind_Insights on the app.

Back to the top

More articles


Editor's Picks

 The Greens, villas: Q1 no change. 3BR - Dh210-250,000. 4BR - Dh210-260,000. 5BR - Dh220-300,000. Q1 2013-Q1 2014 5% rise. Pawan Singh / The National

In pictures: Where Dubai rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 An air traffic control tower is seen at the central terminal of LaGuardia Airport on April 8, 2014. Shannon Stapleton / Reuters

In pictures: New York’s LaGuardia Airport in need of a rebuild

With constraints on its resources and no appetite for further debt, private investors and developers are being tapped to rebuild the 50-year-old central terminal for $3.6 billion, instead of using traditional public finance methods.

 The bridge of Seajacks Hydra, as the wind farm installation vessel undergoes finishing touches and testing works at Lamprell’s Hamriyah facility in Sharjah before its planned delivery on June 2, 2014. Jeffrey E Biteng / The National

In pictures: Building the Seajacks Hydra

The Seajacks Hydra, a wind farm installation vessel, is undergoing finishing touches and testing works at Lamprell’s Hamriyah facility in Sharjah before its planned delivery on June 2, 2014.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 An Uber taxi driver drives his car through a street in New Delhi, India. Saurabh Das / AP Photo

In pictures: On-demand cab service app Uber targets India

Taxi-hailing smartphone app Uber is making a big push into Asia with the company starting operations in 18 cities in Asia and the South Pacific including Seoul, Shanghai, Bangkok, Hong Kong and five Indian cities in the last year.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.

Events

To add your event to The National listings, click here

Get the most from The National