Postponed twice, the trial in the case of the Augusta refinery acquired by Sonatrach in 2018 ended late at night from November 8 to 9. The prosecutor had a heavy hand in demanding 18 years in prison against the former CEO of the oil company Abdelmoumen Ould Kaddour, tried along with three other former executives.
Boss of the oil group between March 2017 and April 2019, Ould Kaddour is being prosecuted for “squandering of public funds, abuse of office and conflict of interest and privilege of a third party in a public contract” in the context of the acquisition, in December 2018, from this refinery located in southern Italy. Former vice-president of the Marketing department, Ahmed el-Hachemi Mazighi, who piloted the Augusta takeover project, as well as Ali Raissi and Brahim Boumarouf, are also being prosecuted in the context of the same case.
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Called to the bar, Ould Kaddour explained at length the genesis and the reasons for the takeover of this refinery commissioned in the 1950s, as well as the amounts disbursed by the oil group. Il explains that, upon his appointment, he developed the “SH 2030” strategy, which aimed in particular to develop the exploration, production and transport sectors.
This strategy involved the construction and acquisition of several refineries in order to reduce the import bill for refined fuel. “Augusta’s objective was to reduce the import bill for refined products, which was 2 billion dollars each year”, maintains Ould Kaddour before the judge.
Favorable opinion of Ahmed Ouyahia
The commission set up within Sonatrach in August 2017 recommends acquiring this Augusta refinery, owned by Esso Italiana, the Italian subsidiary of the American ExxonMobil. The scope of the transaction includes the refinery itself, which covers 300 hectares, three oil terminals in Augusta, Naples and Palermo, as well as associated pipeline systems and a refining capacity of 10 million tonnes per year. .
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In February 2018, Abdelmoumen Ould Kaddour asks former Prime Minister Ahmed Ouyahia (now in prison) for permission to make a bid with ExxonMobil to start talks. Ahmed Ouyahia immediately issues a favorable opinion and sends a copy to the Presidency of the Republic.
A few days later, Sonatrach’s board of directors, on which sit representatives of the presidency, the energy and finance ministries, the tax department and the Bank of Algeria, validates the offer, which will be officially finalized in December 2018. Current CEO of Sonatrach, Toufik Hekkar had even agreed to this takeover as a member of the group’s board of directors
For the judge, this acquisition was made without the approval of the board of directors of Sonatrach. “The problem in this case is not the management of the refinery but the fact that this purchase was made without the agreement of the board of directors”, said the judge. “There was the agreement of the board of directors, the general assembly, the council of ministers, as well as the endorsement of the ministry of Energy”, retorted the accused.
The judge then questions Ould Kaddour on the total amount disbursed by Sonatrach, which would be, according to the magistrate, 2 billion dollars. A price considered by the courts as clearly excessive for a 70-year-old refinery. “The refinery cost 733 millions dollars,” says the defendant.
To this amount must be added 1.1 billion dollars which constitute all the operating costs linked to the repurchase of the crude oil and the products in stock in the three terminals of the refinery, the computer licenses, the customs bonds, the works of renovation, as well as environmental compliance certificates. “The total amount is therefore a little over 2 billion dollars,” adds Ould Kaddour.
Algeria: what results for Ould Kaddour, sacked after two years at the head of Sonatrach?
The former CEO of the oil group says at the helm that this refinery has made 400 million euros in profits since the start of 2022 after two difficult years due in particular to the fall in oil prices and the Covid pandemic.
In his indictment, the prosecutor did not go out of his way, describing the acquisition of Augusta as “fraudulent” and considering that the operation harmed the national economy. He also criticizes Société Générale, which supported Sonatrach in this acquisition, for not having made a good assessment of the project.
The prosecutor also denounced the amount of this purchase, which, according to him, amounted to billions of dollars, and not the 700 million dollars advanced by the former management of the group. The representative of the prosecution therefore claims 18 years in prison against the former CEO.
ExxonMobil and Société Générale spared
For Ould Kaddour’s lawyers, the charges against their client have no basis. The defense points to a Sonatrach document dated October 2021 as proof of this, which concludes that the company suffered no damage related to this purchase. The lawyers also indicate that the third parties, ExxonMobil, Société Générale, as well as the international firm of experts mandated by Sonatrach to advise it on this purchase, have not even been charged.
Algeria: finalization of the purchase by Sonatrach of an ExxonMobil refinery in Italy
For the defense, the refinery is today repaying the debts it contracted with its parent company, Sonatrach, having generated 400 million dollars in profits in 2022, against 255 million in 2021. “The period planned for the amortization of this investment is 8 years, argues one of the lawyers. It is therefore too early today to say that this refinery is not profitable. »
Verdict it 15 November.