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Oman oil executive goes on trial on bribery charges

Thursday, 14 Nov 2013 | 11:34 AM ET

MUSCAT, Nov 14 (Reuters) - A senior official at a state-run Omani oil company went on trial on Thursday on charges of taking a bribe, in a case closely watched in the Gulf Sultanate, which has pledged to root out corruption.

A public prosecutor at a Muscat court accused Juma Al Hinai, the head of the tenders committee at Petroleum Development Oman (PDO), of receiving the bribe from two executives of Galfar Engineering and Contracting, a local firm.

Hinai denied the charges. Mohammad Ali, managing director of Galfar, and Abdulmajeed Nusha are also on trial on charges of paying the bribe. They denied the accusation.

The case appears to be part of a wider official probe into graft in the oil industry. At least one other senior executive is being separately investigated, according to a senior industry official.

The prosecutor alleged that Hinai received the bribe to extend the term of a PDO contract that had been awarded to Galfar in 2011.

Lawyers of the three defendants demanded the hearing be postponed so that they could examine evidence produced by the prosecution, and the next session was set for Nov. 24.

Oman is a significant oil producer, pumping around 950,000 barrels per day of crude, with oil and gas sector revenues making up the vast majority of government revenues. The country sits on the Strait of Hormuz through which some 40 percent of the world's sea-borne oil exports passes.

Oman experienced unrest inspired by Arab uprisings elsewhere early last year, with strikes and protests against unemployment and corruption. It tried to placate demonstrators by pledging to create tens of thousands of public sector jobs.

PDO controls the vast majority of Oman's oil reserves and accounts for more than 70 percent of the country's crude oil production and nearly all of its natural gas.

It is 60 percent owned by the Government of Oman, with Royal Dutch Shell holding 34 percent, Total 4 percent and Partex 2 percent.

Oman Oil Refineries and Petroleum Industries Company (ORPIC) controls the country's refining sector. ($1 = 0.3850 Omani rials)

(Reporting by Fatma Al-Arimi; additional reporting by Daniel Fineren; writing by Mahmoud Habboush; editing by William Maclean and Andrew Roche)