UPDATE 2-Saipem polishes governance after warnings
* Picks veteran legal expert to strengthen governance
* Move follows two profit warnings, corruption probe
* Longstanding executive O'Donnell steps down
* Confirms 2013 guidance for net loss of 300-350 mln euros
(Releads on governance, adds quotes from CEO, details)
MILAN, July 30 (Reuters) - Saipem appointed a corporate law veteran to its board on Tuesday as the Italian oil service group seeks to draw a line under profit warnings and a corruption probe that have wiped out half its market worth.
Saipem, 43 percent owned by state-controlled Italian oil and gas group Eni, said on Tuesday it had appointed legal expert Piergaetano Marchetti as deputy chairman and board director to help revive its fortunes.
"Marchetti is an expert on corporate governance and will bring great depth of expertise," Saipem CEO Umberto Vergine said in a conference call.
Saipem has tested investor loyalty this year by taking an axe to its outlook twice in the space of five months, prompting market regulator Consob to open an inquiry.
In late January, a new management team under Vergine slashed 2013 net profit forecasts because of lower margins on new orders.
Then in June it said it would post a net loss for the year, blaming increasingly strained relations with Algerian energy firm Sonatrach and project difficulties in Mexico and Canada.
The company, once seen as a safe haven for investors due to its track record in beating its targets, is also embroiled in a legal probe into alleged corruption in Algeria that ousted its previous head.
The 73-year-old Marchetti has sat on the boards of many top Italian companies and played a central role in creating a shareholder pact at power broker bank Mediobanca and influential newspaper publisher RCS MediaGroup.
On Tuesday Saipem said deputy CEO Hugh O'Donnell was stepping down after 17 years with the company.
Saipem cheered markets by confirming its guidance for a full-year loss of 300 million-350 million euros ($400 million-$465 million), sending shares sharply higher.
"These are a good set of results in view of the fact that there were rumours out there of a possible third profit warning," Mediobanca Securities oil analyst Andrea Scauri said.
Some analysts had expressed concern the group might lower its 2013 outlook for the third time because of what they saw as aggressive bidding on a pipe tender in Brazil.
Its peers, Norwegian groups Aker and Subsea 7 , have all issued profit warnings this year, blaming Brazilian activities.
In the second quarter Saipem reported a net loss of 685 million euros compared with a profit of 243 million euros the previous year as it booked the damage from its profit warnings.
It said it expected to break even at an operating profit level in 2013 and post revenues of around 13 billion euros.
Saipem shares ended up 5.8 percent at 16.3 euros. ($1 = 0.7547 euros)
(Editing by Pravin Char/Ruth Pitchford)