Shares in Petrofac were trading up more than 7 percent on Monday, as the company was ordered to pay GBP 77 million [$105 million] after the UK's Serious Fraud Office (SFO) secured further convictions in its investigation into bribery and corruption at the Jersey-registered energy services company.
On Friday, Petrofac Limited pleaded guilty to seven separate counts of failing to prevent bribery between 2011 and 2017.
Petrofac Limited admitted that it failed to prevent former senior executives of the Petrofac Group from paying GBP 32 million (USD 44 million) in bribes, to help the Petrofac Group win over GBP 2.6 billion (USD 3.5 billion) of contracts in the oil and gas industry in Iraq, Saudi Arabia and the United Arab Emirates.
The Court heard how, over a period of six years, senior executives within the Petrofac Group engaged in elaborate schemes to corrupt the awarding of contracts, using agents to systematically bribe officials to win lucrative contracts by unfair and dishonest means.
A key feature of the case was the complex and deliberately opaque methods used by these senior executives to pay agents across borders, disguising payments through sub-contractors, creating fake contracts for fictitious services and, in some cases, passing bribes through more than one agent and one country, to disguise their actions.
Lisa Osofsky, Director, Serious Fraud Office, said:
"By pleading guilty, Petrofac Limited has accepted that senior executives within the Petrofac Group acted deliberately and without conscience in the pursuit of greed. The company's failure to prevent this conduct distorted competitive market conditions and tainted the oil and gas industry.
"Today's result should serve as a warning; the SFO will use all the powers at its disposal to root out and prosecute companies and individuals, whose criminal activity detrimentally affects the reputation and integrity of the United Kingdom.
"The SFO welcomes Petrofac Limited taking responsibility for its conduct."
This is the third set of convictions secured by the SFO in its four-year investigation into cross-border corruption at the Petrofac Group. David Lufkin, former Head of Sales at Petrofac pleaded guilty to 11 counts of bribery in 2019 and 3 counts of bribery in 2021.
Lufkin was today sentenced to a two-year custodial sentence, which was suspended for 18 months. In addition to pleading guilty, David Lufkin co-operated with SFO investigators and assisted with the investigation.
The SFO continues to investigate this case.
Petrofac Chairman René Médori said:
"This draws a line under a regrettable period of our history. We have taken responsibility, reformed and learned from these past mistakes, as acknowledged by the SFO and the Court. Most importantly, the extensive work that we have done since the SFO investigation began means that the Petrofac of today has a comprehensive compliance and governance regime that meets or exceeds international best practice.
"The past behaviour uncovered by the SFO would not be possible today, and we look to the future a better and more focused company, well positioned to capitalise on the opportunities we see before us."
On September 21st, 2015, Al Majal Business Park (AMBP) opened its doors in Burjessia, serving local and international clients. Today AMBP is a recognized, leading life support services provider in Iraq.
Innovation has always been part of our journey. We continue to apply value-driven innovative ideas to deliver world-class services at AMBP. Our team works tirelessly to achieve our primary objective; setting a premium standard for life support services in Iraq to help accelerate the development of Iraq's oil and gas industry.
Throughout the years, we have expanded our service offerings at AMBP to accommodate all of our clients' needs. From premium accommodations, office leasing solutions, dining and catering facilities to customized warehousing and workshop solutions and amenities including state of the art recreation and fitness facilities, all of which are offered in a strategically located, highly secured 145,000 sqm property.
6 years at AMBP is a remarkable time of professional activity and exciting projects with notable clients and partners, all of which were accomplished with our valued former and current employees. Currently, AMBP employs around 100 outstanding and experienced professionals. We are proud of our team, full of creativity and determination to offer only the best to our clients.
On this occasion, Mr. Ali Agha Jaffar, the CEO and President of Al Majal said:
"We have earned the trust and respect of the market for one simple reason: we have great people who are dedicated to setting the standard in the industry.
"I would like to thank all of our clients, principals and friends for choosing Al Majal Business Park (AMBP) as your trusted life support services provider in Iraq. We share the success of the past 6 years with you all and look forward to continue contributing to your achievements."
Al Majal Business Park
Al Majal Business Park (AMBP) offers full life support services within two highly secure properties in the south of Iraq, located in North Rumaila and Burjessia. Both locations are strategically located within proximity to major oilfields and provide easy access to major ports and transportation networks.
AMBP has set the standard for premium life support services in Iraq including residential accommodations, customizable office leasing solutions, customizable workshop and warehousing solutions, dining and catering services, security provided by international firms, 24/7 medical services (offered through direct subscription), and premium amenities including state of the art recreation and fitness facilities.
TotalEnergies, the Iraqi Ministries for oil and electricity, and the country's National Investment Commission (NIC) have signed, in the presence of the Prime Minister of Iraq, major agreements covering several projects in the Basra region, designed to enhance the development of Iraq's natural resources to improve the country's electricity supply.
Iraq, a country rich in natural resources, is indeed experiencing electricity shortages while it faces a sharp increase in demand from the population.
TotalEnergies, with the support of the Iraqi authorities, on the one hand will invest in installations to recover gas that is being flared on three oil fields and as such supply gas to 1,5 GW of power generation capacity in a first phase growing to 3 GW in a second phase, and, on the other hand, will also develop 1 GWac of solar electricity generation capacity to supply the Basra regional grid.
These agreements include:
The construction of a new gas gathering network and treatment units to supply the local power stations, with TotalEnergies also bringing its expertise to optimize the oil and gas production of the Ratawi field, by building and operating new capacities.
The construction of a large-scale seawater treatment unit to increase water injection capacities in southern Iraq fields without increasing water withdrawals as the country is currently facing a water-stress situation. This water injection is required to maintain pressure in several fields and as such will help optimizing the production of the natural resources in the Basra region.
The construction and operation of a photovoltaic power plant with a capacity of 1 GWp to supply electricity to the grid in the Basra region.
These projects represent a total investment of approximately $10 billion (100% share).
Patrick Pouyanné, TotalEnergies' Chairman and CEO, said:
"These agreements signal our return through the front door to Iraq, the country where our Company was born in 1924. Our ambition is to assist Iraq in building a more sustainable future by developing access to electricity for its people through a more sustainable use of the country's natural resources such as: reduction of gas flaring that generates air pollution and greenhouse gas emissions, water resource management and development of solar energy.
"This project perfectly illustrates the new sustainable development model of TotalEnergies, a multi-energy Company which supports producing countries in their energy transition by combining the production of natural gas and solar energy to meet the growing demand for electricity. It also demonstrates how TotalEnergies can leverage its unique position in the Middle East, a region where the lowest-cost hydrocarbons are produced, to gain access to large-scale renewable projects."
An Iranian official has said that Iran's natural gas (methane) exports to Iraq have been reduced, but not because of arrears owed by Iraq.
Mohammad Reza Julaei , the Dispatching Director of the National Iranian Gas Company (NIGC), told Shana that exports have been reduced by 38 million cubic meters per day; they were believed to be running about 40 to 45 million cubic meters per day previously.
But he said that this was done based on an agreement and with prior notice, and has "nothing to do with [Iraq's] arrears to Iran."
He added, however, that the need to settle the debts is still on the agenda.
Iraq Britain Business Council (IBBC) member AA for Global Trading and Commercial Agencies has announced that it has started importing the products of Laboratoires Gilbert of France to Iraq, as per an agreement signed in 2020.
Based in France's Normandy region, Laboratoires Gilbert manufactures and markets 30 brands and 1,900 references such as Physiodose, Physiolac, Dolodent, Luc and Léa, Comptoir Aroma, Algotherm, Laino, Hei Poa, and Comptoir du Bain among others.
Currently, AA is the commercial agent of several brands including Metrex Research (USA), Laboratoires Gilbert (France) and Palmer's (USA).
Japan's Minister for Foreign Affairs, Motegi Toshimitsu, visited Iraq on Saturday, meeting with Foreign Minister Fuad Hussein, Prime Minister Mustafa Al-Kadhimi, and President Barham Salih.
Minister Motegi announced that Japan intends to extend the "Basrah Refinery Upgrading Project (Phase 3)" Yen loan project (up to the amount of 32.7 billion yen) [$300 million], and expressed his hopes that this project would contribute to providing the stable supply of energy and to creating jobs in Iraq. In response, Minister Hussein expressed his gratitude.
Minister Motegi added that he appreciates the publication of the "White Paper for Economic and Financial Reforms", and stated that Japan looks to support Iraq's reform efforts together with the international community through the "Iraq Economic Contact Group."
Both sides also exchanged views on measures to prevent the spread of COVID-19 and means to improve the business and investment environment in Iraq.
Young female entrepreneur strives to transform the medical sector in the Kurdistan Region of Iraq
Twenty-five-year-old Nasreen Hassan has been working for years on a business idea that will help hospitals and medical centres in the Kurdistan Region of Iraq improve and maintain their medical equipment.
Having witnessed years of conflict, Nasreen says that she wants to do her part in saving and improving the lives of women, men and children, especially in light of the current worldwide pandemic. "The number of weapons and rockets outnumber medical equipment," said Nasreen. "And I want to correct this."
"Just think about what will make the world better, not only for you, but for everyone around you," said Nasreen. "For me, I want to produce, install and provide maintenance for medical machinery locally. This will help create jobs for young people and open new opportunities for many."
"But most importantly, it will save and improve lives."
Unable to pursue a degree in medical engineering, the IT graduate recently joined the ILO's Start Your Business (SYB) training programme in Iraq, aimed at giving her the knowledge and tools needed to set up her business.
Start Your Business is part of the wider Start and Improve Your Business (SIYB) training package designed to respond to the progressive stages of business development. The training in Iraq aims to support young refugees, internally displaced people, and vulnerable host community members who are interested in setting up their own small businesses or improving existing ones.
"The most beneficial part of the training was the business plan, even though I already had some knowledge on the subject, but not in such detail or depth," said Nasreen. "From the first day of the training with the ILO, I have been working on my business plan, one step at a time. I have been revising it and adding new ideas on the way, because the more we moved forward with the training, the more our ideas expanded, reflecting the reality more and more."
The training is part of efforts being implemented by the ILO under the "Partnership for improving prospects for forcibly displaced persons and host communities," also known as PROSPECTS , a multi-agency programme supported by the Government of the Netherlands.
For the ILO one of the key areas of focus of PROSPECTS in Iraq is to support youth to transition from learning and skills development to decent work, through a range of wage employment and self-employment interventions, in collaboration with other PROSPECTS partners, including UNICEF.
This includes training trainers from different organizations on ILO's training package, including banks and microfinance institutions, trainers from UNICEF-supported youth centres, and local NGOs supporting Small and Medium Enterprises. It also involves referring youth (including Nasreen who recently received life skills training through ACTED at a UNICEF-supported youth centre) to the ILO for further support.
For Nasreen, there are many hurdles to overcome and training opportunities to pursue. Yet despite the long journey ahead, she is determined to see her business plan come to life.
"I need financial support and I need more training, which will help me reach a stage where I have the technical know-how on establishing my business, even if it takes twenty years," said Nasreen. "I would like to say to other young people in my position that they should also pursue their goals; whether in terms of studying or employment. Don't let anything get in your way."
PROSPECTS is a strategic four-year global partnership that supports host communities and displaced populations in eight countries across East and North Africa and the Arab States and which also includes the International Finance Corporation (IFC), the World Bank (WB) and the United Nations High Commissioner for Refugees (UNHCR).