Petrofac will plead guilty to seven counts of failing to prevent bribery, the potential endpoint in a long-running investigation into allegations company executives paid to win lucrative contracts in Iraq, Saudi Arabia, and the United Arab Emirates (UAE).
The oilfield services company announced Friday it reached a plea agreement with the U.K. Serious Fraud Office (SFO) regarding the case. Petrofac was accused of offering bribes to win contracts worth $730 million in Iraq and more than $3.5 billion in Saudi Arabia.
A sentencing hearing was scheduled to begin at Southwark Crown Court on Monday before being delayed to Friday. Penalties in the case are expected to be announced Oct. 4 and will be determined “at the sole discretion of the Court,” the company noted.
Petrofac’s former head of global sales, British national David Lufkin, pleaded guilty to 11 counts of bribery in 2019 related to the alleged bribes in Iraq and Saudi Arabia. In January, Lufkin pleaded guilty to three additional counts of bribery related to attempts to influence the awarding of $3.3 billion worth of contracts in the UAE.
In all, the bribery offenses occurred from 2011-17, the SFO said.
In a statement, Petrofac noted all employees involved with the illegal conduct had left the company and touted numerous improvements made to its compliance processes aimed at preventing similar offenses in the future.
“This was a deeply regrettable period of Petrofac’s history. We are committed to ensuring it will never happen again,” said Chairman René Medori. “We have fundamentally overhauled our compliance regime, as well as the people, and the culture that supports it. Our comprehensive programme of corporate renewal has been acknowledged by the SFO. Petrofac has been living under the shadow of the past, but today it is a profoundly different business, in which stakeholders can be assured of our commitment to the highest standards of business ethics, wherever we operate.”
Commenting on the case, Aziz Rahman, founder and senior partner at the firm Rahman Ravelli, said it struck him as unusual Petrofac did not enter into a deferred prosecution agreement (DPA).
“The SFO clearly had its reasons for not offering Petrofac a DPA—or at least for not being able to agree one—despite the noises being made that Petrofac is no longer the company it was when it was committing these offences. This is a resolution that appears to buck the recent trend for DPAs,” he said.
“Petrofac appears to have accepted the need to cut its losses, agree to take its punishment, and move on,” he added.
Compliance takeaways: Petrofac has made numerous improvements to its policies and procedures in the aftermath of the bribery scandal.
The company says it now has “a well-developed, comprehensive compliance and governance regime” that is “supported by a dedicated compliance and investigations team, new systems and technologies, mandatory training, and a company culture based on ethical business conduct and transparency.”
The compliance regime has full support at all levels and is “supplemented by regular independent verification,” the company said.
In addition, Petrofac’s past practice of using agents to negotiate contracts has ended, other than required by law, and those agents who do negotiate on behalf of the company are “subject to enhanced audit and additional controls.”
Editor’s note: This story was updated Oct. 1 to reflect Petrofac’s notice that penalties in the case are expected to be issued Oct. 4.