Petrofac Ltd, a British oilfield services provider, agreed Monday to pay the UK Serious Fraud Office £77 million ($104.6 million) in penalties for Bribery Act offenses in Iraq, Saudi Arabia, and the United Arab Emirates.
As part of the plea agreement with the SFO, Jersey-based Petrofac pleaded guilty to seven separate offenses of failing to prevent bribery between 2011 and 2017, the SFO said Monday.
According to the SFO, Petrofac used agents to “systematically bribe officials” to win contracts in Iraq, Saudi Arabia and the United Arab Emirates.
As part of Monday’s settlement, Petrofac agreed to pay a confiscation order of £22.8 million ($31 million), a fine of £47.2 million ($64.2 million), and £7 million ($9.5 million) to cover the SFO’s costs.
In February 2019, British national and former global head of sales for Petrofac David Lufkin, 51, pleaded guilty to eleven counts of violating sections 1(1) and 1(2) of the UK Bribery Act 2010.
Lufkin’s offenses related to making corrupt offers to influence contact awards to Petrofac in Iraq worth more than $730 million and in Saudi Arabia worth over $3.5 billion, the SFO said
In Iraq, Petrofac paid bribes of $2.2 million via two agents. It won a $329.7 million engineering, procurement, and construction contract for the Badra oilfield in February 2012.
Another $4 million bribe to an agent resulted in award in Iraq of a contract to Petrofac and three annual renewals worth a combined value of $400 million, the SFO said in a previous statement.
In Saudi Arabia, Petrofac paid $45 million in bribes through its agent between July 2012 and November 2015 for various contracts worth $3.72 billion.
Lufkin, the former sales head who pleaded guilty to 11 bribery-related counts in 2019, pleaded guilty in January 2021 to three additional counts of bribery related to contracts Petrofac won in the UAE worth $3.3 billion.
Lufkin was also sentenced Monday. He received a two-year custodial sentence, which was suspended for 18 months, for committing 14 counts of bribery.
None of the agents were named in Monday’s settlement. In a 2017 company statement, Petrofac said the SFO investigation was related to “Unaoil and other agents.”
In the past two years, four individuals connected to Unaoil have been sentenced to prison in the UK for bribery related to the Iraqi oil industry following the overthrow of Saddam Hussein.
In the United States, Unaoil’s former CEO Cyrus Ahsani and former COO Saman Ahsani, both UK citizens, pleaded guilty in 2019 to one count of conspiracy to violate the Foreign Corrupt Practices Act. In 2018, Unaoil’s former business development director, Steven Hunter, pleaded guilty to one count of conspiracy to violate the FCPA. He’s a UK resident. All three are waiting to be sentenced.
In a statement last month, Petrofac Chairman René Medori said, “This was a deeply regrettable period of Petrofac’s history. We are committed to ensuring it will never happen again.”
According to data from FCPA Tracker, Petrofac first disclosed the investigation publicly in April 2016.
The SFO launched an official investigation on May 12, 2017, according to its website.
Petrofac employs 9,400 people in 30 offices worldwide.
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