29 May 2009 | Martha McKenzie-Minifie
Oil and gas exploration company Cadogan Petroleum is investigating "potential procurement irregularities" which could be worth up to $7 million (£3.4 million).
In a statement issued to the stock exchange today, the London-based company said it had identified "potentially irregular payments … in the range of $5-7 million (£3.1-3.4 million)".
Evidence of the payments emerged during a board review of the business and relate to the procurement of and payment for certain assets and services. Cadogan's exploration is exclusively located in the Ukraine.
"The board together with its legal advisers is conducting a full investigation of these matters and a further announcement of the outcome of that investigation will be made in due course," said the statement.
In February Dragon Oil announced its internal audit department had identified possible irregularities within its marketing and contracts departments (Web news, 26 February 2009). The Ireland-registered oil producer issued a further statement in March with "preliminary findings" of an audit by KPMG that said there was "no material impact" on its financial position.
* Elsewhere in the oil and gas sector this week, the incoming chief executive of Shell, Peter Vosser, indicated he would move to further cut costs at the energy giant. Unveiling a new management structure, Vosser said: "These changes will increase our focus, accelerate our plans to reduce complexity, corporate overheads and costs, and result in faster decision-making and delivery."