Turkmenistan: Dragon Oil Guilty of "Certain Irregularities"

The Dubai-based oil company Dragon Oil, which operates almost exclusively in the Turkmen portion of the Caspian Sea, admitted in a statement released March 24 that senior employees solicited bribes from contractors.

The company launched an investigation into what it termed "certain irregularities" in February after an internal audit uncovered instances of corruption. The company stalled on the publication of its year-end results while an accounting firm KPMG probed the "completely unacceptable behavior."

The March 24 statement, posted on the company's website, indicated that those suspected in the bribery scandal have been fired. It did not identify the suspects by name due to legal considerations.

"Preliminary findings from the investigation indicate that improper conduct relating to procurement activities was confined to the marketing department and the contracts department," the statement said. "Although internal controls were in place, the individuals involved managed to override the various controls in the procurement process through collusion."

The marketing department oversees how Dragon Oil's output is exported from Turkmenistan. According to the company website, last year 80 percent of its oil left for Iran, while 20 percent went to Azerbaijan.

Dragon Oil, which is floated on the London and Irish stock markets, is partially owned by the government of Dubai. The company website boasts that 90 percent of its employees are Turkmen. Company results for the year ending December 2008 are due to be announced March 27.