The shares of Saipem, Europe’s biggest oil services group, slipped 8.2 percent after it emerged the company was being investigated for orders it had won in Algeria.
It also emerged that the CEO, Pietro Franco Tali, had resigned from the company following the announcement of the investigation.
This ignited worries over possible penalties and future of the company’s operations in Algeria.
But the European oil and gas index ticked up 0.5 percent on Wednesday.
Tali resigned on Wednesday after it emerged that Milan prosecutors were investigating the company.
Saipem, which said it acted in compliance with the law, said the probe was looking into activities up through 2009.
Reuters reported that an Italian newspaper Il Sole 24 Ore said the case focused around an order worth about 580 million euros ($758 million) to build a gas pipeline in Algeria called GK3.
Saipem is controlled by Italian oil and gas major Eni. It has worked on many contracts in Algeria with state energy firm Sonatrach, Algeria’s biggest oil and gas explorer.
It is believed that Saipem helped build the pipeline from Algeria that currently transports around a fifth of Italy’s gas supplies.
The company is also enmeshed with Sonatrach in the GALSI gas pipeline project that will carry Algerian gas into Italy via the island of Sardinia.