The Securities and Exchange Commission (SEC) is conducting a formal investigation into payments made in connection with the construction and subsequent expansion by TSKJ of a multibillion dollar natural gas liquefaction complex and related facilities at Bonny Island in Rivers State, Nigeria. The United States Department of Justice is also conducting an investigation. TSKJ is a private limited liability company registered in Madeira, Portugal whose members are Technip SA of France, Snamprogetti Netherlands B.V., which is an affiliate of ENI SpA of Italy, JGC Corporation of Japan, and Kellogg Brown & Root, each of which owns 25% of the venture.

The SEC and the Department of Justice have been reviewing these matters in light of the requirements of the United States Foreign Corrupt Practices Act (FCPA). We have produced documents to the SEC both voluntarily and pursuant to subpoenas, and we are making our employees available to the SEC for testimony. In addition, we understand that the SEC has issued a subpoena to A. Jack Stanley, who most recently served as a consultant and chairman of Kellogg Brown & Root, and to other current and former Kellogg Brown & Root employees. We further understand that the Department of Justice has invoked its authority under a sitting grand jury to obtain letters rogatory for the purpose of obtaining information abroad.

Really I want to talk a little bit about the history. It was Technip of France, MW Kelogg of the UK who got together and formed a consortium in the early 1990s. We met one of the consortium members and made us to understand the project was very complex, it was a grassroot project in Nigeria, Bonny island was not developed like it is today a very big plant that you are adding capacity to the plant. Back to the TSKJ, when the consortium won the contract in the early 1990s, they had to hire a consultant agent Trikestar which was an expert and they signed up a contract which was not abnormal at the time, to pay the agent 2 per cent of the revenue. A consultant agent, at that time was to give advice on Nigeria, open the doors set up meetings, to help you get certain things in Nigeria and that was in 1992 or '94. And at the time there were discussions about the possibility of making payments and that is part of the documentation that we have turned over. We have not found proof that those kinds of payments were made but that payment was considered.