Dutch oil and gas services company SBM Offshore said it has reached a leniency agreement with Brazilian authorities to resolve allegations relating to the Petrobras bribery scandal.
On July 26, SBM Offshore and SBM Holding said it signed a leniency agreement with the Brazilian Ministry of Transparency and Comptroller’s General Office (in Portuguese, Controladoria-Geral da União – “CGU”), the General Counsel for the Republic (Advocacia Geral da União – “AGU”), and Petrobras.
The leniency agreement provides for cash payment by SBM Offshore to Petrobras totaling approximately U.S. $148 million (to be paid within 90 days), of which approximately $71 million is a civil fine and approximately $77 million is compensation for alleged damages. SBM Offshore and Petrobras will normalize business relations in respect of tenders, with SBM Offshore now able to effectively compete for new business opportunities.
“The leniency agreement with CGU, AGU and Petrobras marks a key milestone towards a closure of the company’s legacy issues in Brazil,” SBM Offshore CEO Bruno Chabas said in a statement. “This agreement supports the continuation of our long-lasting relationship with Petrobras and will allow SBM Offshore to successfully pursue new business opportunities in Brazil.”
The current agreement follows previous resolutions reached by the company with the Dutch Public Prosecutor (Openbaar Ministerie – “OM”), and with the U.S. Department of Justice. The agreement is to a large extent comparable to the agreement reached in July 2016 with CGU, AGU, and Petrobras and that also included the Brazilian Federal Prosecutor’s Office (Ministério Público Federal – “MPF”). This agreement, however, ultimately was not approved by the Fifth Chamber of the MPF. “The payment amounts agreed upon in the leniency agreement are in line with the provision maintained by the company corresponding to this initial agreement,” SBM Offshore said.
Under the terms of the leniency agreement, CGU, AGU and Petrobras commit to terminate their investigations against the company and refrain from initiating new legal proceedings under the Improbity Law, Anti-Corruption Law, and Public-Procurement Law in relation to the legacy issues in Brazil.
The company is invited back to participate in Petrobras’ tenders under equal conditions as other bidders. In the leniency agreement, Petrobras represents that in relation to the conduct covered by the leniency agreement, it will not adopt any measures that may jeopardize the ability of SBM Offshore to conduct business in Brazil.
SBM Offshore said it continues to cooperate with investigations conducted by CGU and AGU into third parties in relation to the conduct covered by the leniency agreement. For three years following the signing of the leniency agreement, SBM Offshore will periodically report to CGU on its compliance program.