Petrofac Hit With $105 Million Penalty In Bribery Case

The Southwark Crown Court has imposed a total penalty of $104.6 million to oilfield services provider Petrofac regarding seven offenses of failing to prevent former company employees from bribing agents between 2012 and 2015.

The company previously plead guilty to all seven counts as it admitted that former Petrofac employees offered or made payments to agents about projects awarded between 2012 and 2015 in Iraq, Saudi Arabia, and the UAE.

In total, the company’s former employees paid $44 million in bribes made to secure lucrative contracts worth $3.6 billion.

In a statement on Monday, Petrofac reminded that all employees involved in the charges have left the company and that this sentencing concluded the Serious Fraud Office’s investigation into the company.

In determining the penalty, the Court and the Serious Fraud Office acknowledged Petrofac’s corporate reform through its transformation of the company’s leadership, personnel, compliance, and assurance processes.

The penalty is comprised of the following elements: a confiscation order of $31 million payable by January 3, 2022; a fine of $64.2 payable on February 14, 2022; and the Serious Fraud Office’s costs of $9.4 million payable on February 14, 2022.

“This draws a line under a regrettable period of our history. We have taken responsibility, reformed, and learned from these past mistakes, as acknowledged by the SFO and the Court. Most importantly, the extensive work that we have done since the SFO investigation began means that the Petrofac of today has a comprehensive compliance and governance regime that meets or exceeds international best practice,” Petrofac Chairman René Médori said. “The past behavior uncovered by the SFO would not be possible today, and we look to the future a better and more focused company, well-positioned to capitalize on the opportunities we see before us.”

“We are now in a position to put this behind us. This part of our history does not represent the Petrofac of today – a company that as its new CEO I am proud to lead, and which operates upon the core principle of ethical business conduct, supported by a comprehensive governance regime,” Group Chief Executive Sami Iskander added.

“We have refined our best-in-class delivery capabilities, restructured the business around technical excellence, re-focused on our customers, hired new talent, and further sharpened our cost-competitiveness.

“We emerge from this cloud as the world needs more energy – both traditional energies that can be produced most efficiently, and renewable energies on which a lower carbon world can be built. Petrofac is well-positioned to support both, with the capabilities, experience, and expertise to deliver for our expanding customer needs. Our markets in both traditional and new energies are growing, and we have a clear path to rebuild our business with a differentiated customer proposition that sets us apart,” Iskander stated.

Worth adding, former senior Petrofac executive David Lufkin earlier this year pleaded guilty to three further bribery offenses regarding deals in the UAE. This is on top of the 11 charges Lufkin plead guilty to in February 2019.

The offenses were related to corrupt offers and payments made to agents by Lufkin between 2012 and 2018 to influence the award of contracts to Petrofac in the UAE worth around $3.3 billion.

Lufkin’s sentencing occurred on the same day as Petrofac’s and he was sentenced to a two-year custodial sentence, which was suspended for 18 months. The Serious Fraud Office said in a separate statement that, in addition to pleading guilty, Lufkin cooperated with SFO investigators and assisted with the investigation.

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