United States of America has launched a comprehensive probe of the Nigerian oil industry over an alleged bribery scandal involving a former Halliburton subsidiary, Kellogg Brown and Root, (KBR) and some unnamed Nigerian officials during negotiation for its work on a key Royal Dutch Shell project in Nigeria. The probe is to cover a period of 20 years.

Halliburton's Nigerian scandal widened from accusations of bribery to accusations of embezzlement by senior executives. The company recently dismissed two of its most senior executives, Robert Stanley and William Chaudin, on suspicion of embezzling $5 million from a Nigerian energy project.

The KBR is a leading global engineering, construction and services company supporting the energy, petrochemicals, government services and civil infrastructure sectors. The Financial Times of London quoted the US authorities weekend as saying that they have evidence that an agent used by Halliburton's former KBR subsidiary made payments to Nigerian officials in connection with the Shell project.

The scandal was discovered through a voluntary filing made by Halliburton to the US Securities and Exchange Commission at the end of last month. The US investigation into Halliburton's Nigerian operations - covering a period when the company was headed by Dick Cheney, US vice-president is said to have uncovered evidence of bribery and is now looking at a range of payments made in a number of countries over the past 20 years, according to the company. Shell said it was aware of the Halliburton filing and was "looking into the matter".

Ann Pickard, regional executive vice-president for Shell in Africa, told the Financial Times it was the company's policy to co-operate with requests for information from government investigators, although she had no knowledge of any possible inquiry relating to the EA project.

The developments highlight the problems the investigation is creating for Halliburton and the western multinationals it has worked for in a nation whose oil industry is plagued by production disruptions.

Halliburton's partners in the Nigerian project included the French construction group, Technip, and the Gibralter-based brokerage Tri-Star. Since many of the alleged payments took place on VP Dick Cheney's watch, French authorities are interested in his perspective on the situation.

The SEC is investigating allegations that KBR was involved in paying $180 million in bribes to get a natural gas project contract in Nigeria.

The Justice Department is also reviewing documents voluntarily provided by Halliburton

Halliburton and KBR have reportedly suspended the agent and another agent who had worked for KBR on "several current projects and on numerous older projects going back to the early 1980s", the filing says. The EA oil and gas field began operations in 2002 using a giant production and storage vessel known as the Sea Eagle, whose 170,000 barrel-a-day capacity is vital to Shell.

The US investigation relating to the EA field is an offshoot of criminal and civil probes into allegations that KBR and its partners in a consortium known as TSKJ agreed to pay more than $170m of bribes to win billions of dollars of construction work on a giant Nigerian gas liquefaction plant also operated by Shell. According to notes compiled by a TSKJ agent - divulged to investigators by Halliburton and detailed in next week's issue of Africa Confidential magazine - members of the consortium discussed the allocation of money for "culture" and debated the merits of making "secret" and "open" payments to agents.

Halliburton was alleged to have paid Nigerian tax official bribes worth $2.4 million in 2000 to reduce its tax burden in Nigeria. Investigations were launched on $180m in payments allegedly made by a consortium led by Halliburton to secure the contract to build a $4 billion liquefied natural gas plant in Nigeria awarded in 1995 to four partners.

The cash was allegedly channelled through a US-owned oil engineering firm in London called MW Kellogg and was handled by a company executive based in Berkshire. The funds were said to have been paid into a Swiss bank by a British lawyer.