Keppel acknowledges ‘suspicious’ transactions in Brazil

Keppel, Singapore’s builder of offshore drilling rigs, has acknowledged it might have been involved in a bribery case in Brazil, and that its former agent in the country might have acted “suspiciously”.

To remind, Zwi Skornicki, an employee of Eagle do Brasil which was the agent of Keppel FELS in Brazil, was arrested on February 22, 2016. He was charged with paying bribes on behalf of Keppel FELS in Brazil related to contracts entered into between Keppel with oil firm Petrobras and offshore driller Sete Brasil.

Skornicki then testified before a court in Brazil that Keppel authorized him to pay bribes in order to get contracts in Brazil.

Keppel has previously refuted all the allegations linking it to the bribery scandal in Brazil, however, it on Thursday, October 4, said ‘suspicious transactions’ might have occurred.

“Following further internal investigations, Keppel recognizes that certain transactions associated with Mr. Skornicki may be suspicious. Keppel has notified the authorities in the relevant jurisdictions of its intention to cooperate and work towards the resolution of the underlying issues arising from or in connection with the transactions,” Keppel said.

“The matter continues to be under review and Keppel will make further announcements as appropriate. Shareholders are advised to exercise caution when dealing with the securities of Keppel. Keppel reiterates its zero-tolerance stance against any form of illegal activity, including bribery and corruption, involving its employees or associates,” Keppel added.

As previously reported, Keppel won orders from Sete Brazil to build six drilling rigs, back in 2011 and 2012. Sete Brasil was formed in 2011 to own and operate drilling rigs to be used by Petrobras for drilling offshore Brazil.

However, Sete Brazil was subsequently linked to the largest corruption scandal in Brazil, the Lava Jato, which blocked it from obtaining the previously approved bank loans that were meant to be used for rig payments.

Also, Petrobras has been postponing its decision to sign a long-term contract for Sete’s rigs. All this has lead to Sete failing to pay installments for more than $10 billion dollars worth of drilling rigs it had ordered from Sembcorp and its compatriot Keppel. This lead to Sete filing for bankruptcy protection earlier this year.

Following Sete missing installment payments Keppel has stopped working on the rigs since the end of 2015. Keppel in 2015 also made a S$230 million provision on the assumption that Sete may not continue its business as before. It has also excluded Sete’s projects from its net orderbook.

Offshore Energy Today Staff

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