John Wood Group reserves $46M to resolve bribery investigations

In April 2017, prior to its merger with Wood Group, Amec Foster Wheeler said it had received voluntary requests for information from the U.S. Securities and Exchange Commission and the U.S. Department of Justice “regarding the historical use of agents by Foster Wheeler, primarily in the Middle East, and certain of the company’s other business counterparties in that region.”

Amec Foster Wheeler also made a disclosure to the U.K. Serious Fraud Office (SFO). In July 2017, the SFO opened an investigation into the company, its predecessor companies, and associated persons. “The investigation focuses on the past use of third parties and possible bribery and corruption and related offenses and relates to various jurisdictions,” Wood Group said in its 2019 annual report, released Tuesday. It added that it is “cooperating with, and assisting, the SFO in relation to this investigation.”

Additionally, authorities in Brazil (namely, the Federal Prosecution Service and the Office of the Comptroller General) have also been made aware of certain matters related to these investigations, Wood Group said. “Independently, the Group has conducted an internal investigation into the historical engagement of Unaoil by legacy Wood Group companies, reviewing information available to the Group in this context.”

“This internal investigation confirmed that a legacy Wood Group joint venture engaged Unaoil and that the joint venture made payments to Unaoil under agency agreements,” it added. “In September 2017, the Group informed the Crown Office and Procurator Fiscal Service (COPFS), the relevant authority in Scotland, of the findings of the internal investigation.”

The COPFS has jurisdiction over the investigation. With the COPFS’ consent, the company said it has taken steps “to conclude its investigations and intends to engage in a transparent and cooperative manner with COPFS regarding matters within COPFS’ jurisdiction.”

Settlement details

Related to the investigations by authorities in the United States, Brazil, and Scotland, Wood Group said discussions concerning possible resolutions “have progressed to the point where the Group believes that it is likely to be able to settle the relevant matters with these authorities at an aggregate cost of approximately $46 million.” In its half-year report, it further disclosed it has incurred “investigation support costs” of $8.8 million related to the ongoing investigations.

Wood Group said it could face further potential civil and criminal consequences in relation to the SFO investigation. At this time, however, it said there have been “no material developments in the previously disclosed investigations in the United Kingdom and in the United States. Wood Group said it “continues to cooperate with and assist the relevant authorities in relation to their respective investigations.”

Related investigations

In October 2019, the Justice Department announced that three Unaoil executives—including the former CEO and chief operations officer—pled guilty for “conspiring to facilitate bribes on behalf of companies in foreign countries in order to secure oil and gas contracts.” Other companies that have disclosed Unaoil-related investigations or have faced related enforcement actions include Honeywell International; TechnipFMC; Petrofac; SBM Offshore; ABB; and KBR.