Court fines Petrofac over bribes to secure contracts
Oilfield services provider Petrofac has been ordered by a UK court to pay a fine of about $105 million in sentencing related to seven historic bribery offences.
Petrofac in late September reached a plea agreement with the UK Serious Fraud Office (SFO) in relation to its investigation into the company’s historical use of agents. The sentencing hearing was initially scheduled for Monday 27 September, however, it was later postponed to the beginning of October.
The hearing at Southwark Crown Court started on 1 October and the sentencing took place on Monday 4 October 2021, thus concluding the Serious Fraud Office’s investigation into Petrofac.
The SFO previously detailed a potential penalty of $240 million prior to the application of any adjustment to the level of fine and the company made a submission to the Court for a substantial reduction based on alternative approaches to sentencing and its ability to pay.
Southwark Crown Court on Monday imposed a total penalty of GBP 77 million (about $104.6 million) in relation to seven historic offences of failing to prevent former Petrofac Group employees from offering or making payments to agents in relation to projects awarded between 2012 and 2015, contrary to Section 7 of the UK Bribery Act 2010. All employees involved in the charges have left the business.
In determining the penalty, the Court and the SFO acknowledged Petrofac’s corporate reform through its transformation of the company’s leadership, personnel, compliance, and assurance processes.
The penalty is comprised of a confiscation order of GBP 22.8 million payable by 3 January 2022; a fine of GBP 47.2 million payable on 14 February 2022; and the Serious Fraud Office’s costs of GBP 7 million payable on 14 February 2022.
Chairman, René Médori, said: “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”.
Group Chief Executive, Sami Iskander, said: “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”.
To remind, following his appointment in October 2020, Sami Iskander assumed the role of Petrofac chief executive on 1 January 2021.
He added: “We emerge from this cloud as the world needs more energy – both traditional energies that can be produced in the most efficient manner, and renewable energies on which a lower carbon world can be built”.