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Extractive Industries/Mining/Oil & Gas
London, United Kingdom
Nationality of Foreign Officials: Iraq, Kazakhstan, Kuwait
Summary of Allegations:
Unaoil allegedly paid bribes to officials in Kazakhstan, Kuwait and Iraq to help Petrofac win public contracts.
Peter Warner, then vice-president of Petrofac, allegedly played an active role in managing these corrupt bribe payments. For instance, in early October 2006, Warner allegedly authorized Unaoil to send at least USD 2 million to a front company located in Marshall Islands owned by Erik Vanagels, Latvian middleman, in attempt to disguise the originator of the funds. Allegedly under Warner's directions, Unaoil, through Vanagels and other intermediaries, made confidential payments to to influence those with authority to award public contracts to Petrofac.
Following Warner's retirement from Petrofac in 2014, he was appointed to Unaoil's board.
Petrofac used Unaoil for consulting services in Kazakhstan from 2002 to 2009.
According to the SFO, Petrofac secured an Engineering, Procurement and Construction (“EPC”) contract in Iraq in 2012 by paying USD 2.2 million bribes to two agents. Additionally, USD 4 million bribes were offered by Petrofac to an agent to obtain Fao Terminal O&M contract in 2012, with three annual extensions up to 2015, worth more than USD 400 million in total. Moreover, it attempted to induce another agent to extend the Badra Operations and Maintenance contract but failed to influence the extension decision.
Approximate Alleged Payments to Foreign Officials: at least USD 2 million
Business Advantage Allegedly Obtained: award of public contract
Nationality of Foreign Officials: Saudi Arabia
Summary of Allegations:
In Saudi Arabia, between 2012 and 2015, Petrofac utilized an agent with USD 45 million bribes to lock up three EPC contracts: USD 463 million Petro Rabigh Phase II Petrochemical Expansion Project, USD 1.7 billion Jazan Refinery and Terminal Project, and USD 1.56 billion Fadhili Gas Plant Project. In between, it also made a few unsuccessful attempts to bribe via agents for other contracts.
Approximate Alleged Payments to Foreign Officials: USD 45 million
Business Advantage Allegedly Obtained: Government contracts
Nationality of Foreign Officials: Syria
Summary of Allegations:
In 2008 and 2009, Unaoil allegedly promised a middleman close to the regime of Syrian president Bashar al-Assad 2.75 million euros allegedly for his assistance in helping Unaoil's client, Petrofac, win contracts from Assad regime petroleum companies.
Approximate Alleged Payments to Foreign Officials: USD 2.75 million
Business Advantage Allegedly Obtained: award of public contract
Nationality of Foreign Officials: United Arab Emirates
Summary of Allegations:
Between 2012 and 2018, Lufkin provided approximately US$30 million in illicit payment via agents to secure three contracts for Petrofac in UAE.
Approximate Alleged Payments to Foreign Officials: US$30 million
Business Advantage Allegedly Obtained: To influence the award of contracts
Agencies: Internal Investigation
Results:
Year Resolved: 2016
Compliance Monitor:
Ongoing: No
Details:
On 7 April 2016, Petrofac confirmed that it has launched an internal investigation into Petrofac's involvement with the Unaoil scandal. Although the company has not identified any evidence of wrongdoing at the time of the press release, Petrofac disclosed that it has appointed Freshfields Bruckhaus Deringer and KPMG LLP to assist the company in conducting a full investigation.
On 1 August 2016, Petrofac disclosed that its independent investigation into the matter found no evidence that bribes were paid between 2002 and 2009 when Petrofac retained Unaoil for consulting services in Kazakhstan.
In May 2017, Petrofac suspended Marwan Chedid, chief operating officer and a member of Petrofac's board of directors. The company also determined to form a committee to handle the SFO investigation, made up of the chairman, chief financial officer and independent directors.
Agencies: United Kingdom: Serious Fraud Office
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:
On 12 May 2017, the U.K. Serious Fraud Office ("SFO") confirmed that it is investigating Petrofac for bribery, corruption, and money laundering. The company disclosed that both its chief executive officer, Ayman Asfari, and its chief operating officer were questioned by the SFO concerning Unaoil.
Petrofac is cooperating with the investigation. According to media reports, the company could be fined USD 800 million.
Asfari is a member of the "leader's group," donors who donate at least GBP 50,000 to the Conservative party each year. Members of the group are invited to join senior officials at dinners. Asfari is also a business ambassador, which allows him to hold meetings abroad on behalf of the British government, lead trade missions, host "high-level" visitors, and hold meetings with senior government ministers.
7 February 2019, the former Global Head of Sales for Petrofac David Lufkin pleaded guilty in a court in the U.K. to a violation of the UK Bribery Act 2010 by offering bribes to secure contracts worth over USD 730 million in Iraq and USD 3.5 billion in Saudi Arabia.
On 17 February 2019, the SFO accused Petrofac’s co-founder Maroun Semaan who died in 2017 of orchestrating bribery schemes with David Lufkin in Iraq and Saudi Arabia.
On 14 January 2021, David Lufkin pleaded guilty to three additional counts of bribery relating to illicit payments between 2012 and 2018, which helped Petrofac secure contracts from the UAE.
In addition, some of these payments were made by agents on behalf of Petrofac to obtain contracts connecting with two projects located in Abu Dhabi.
On 4 October 2021, Petrofac pleaded guilty to failing to prevent its former executives of Petrofac group subsidiaries from bribing officials to secure oil contracts in Iraq, Saudi Arabia, and the UAE.
On the same day, a UK court convicted Petrofac of seven counts of failure to prevent bribery between 2011 and 2017. The company was ordered to pay approximately US$ 106 million and confiscate approximately US$ 31.5 million including a fine and SFO’s costs.
Lufkin was convicted of 14 counts of bribery and sentenced to a two-year custodial sentence with an 18-month suspension.
On 15 December 2021, the SFO secured a GBP 140,000 confiscation against Lufkin.
According to the SFO, the investigation into Petrofac remains active.
On 29 April 2022, the SFO disclosed that it had recovered £567,466.53 from personal bank accounts linked to Basim Al Shaikh (now deceased), a former fixer for the Petrofac group. Mr Al Shaikh used two United Arab Emirates companies, Gulf Development Marine Services (GDMS) and Northern Coast Construction Materials (NCCM) to launder bribes paid to secure contracts for the Petrofac group in the UAE.
Discovery Method: Media or Investigative Report
Details:
Investigative report by Fairfax Media and the Huffington Post revealed the allegations of bribery involving multinational corporations, including Petrofac, centered around Unaoil.
Country: