Petrofac suspended from new Adnoc tenders
The London-listed company's shares fell as much as 12 per cent after it said UAE's oil and gas giant Adnoc had notified it of the decision
Oilfield services provider Petrofac has said it had been barred from competing for new contracts in the UAE, after a former executive pleaded guilty in Britain related to bribery charges in January.
"Petrofac Ltd announces it has today been notified by Adnoc Group that it has been suspended from competing for new awards until further notice. This follows the SFO's announcement of additional pleas in January by a former Petrofac employee under the Bribery Act 2010 in relation to historic contract awards in the UAE in 2013 and 2014," Petrofac said in a statement.
Petrofac's UAE joint venture, Petrofac Emirates, has its base in Abu Dhabi while Petrofac International is headquartered in Sharjah.
The London-listed company's shares fell as much as 12 per cent after it said UAE's oil and gas giant Adnoc had notified it of the decision.
Britain's Serious Fraud Office (SFO) was looking into payments made to agents to influence awarding of contracts worth $3.3 billion.
The company said it would, nonetheless continue to execute two engineering, procurement and construction (EPC) projects for Adnoc currently under construction.
"Adnoc has stated that it recognises the long-standing nature of its relationship with Petrofac and has confirmed that its decision will be reviewed on a periodic basis," Petrofac said.
"Petrofac is committed to operating at the highest standards of ethical business practice. No charges have been brought against any Petrofac Group company or any current officer or employee," Petrofac added. The company did not go into details on the reported pleas in January.
A press statement on the SFO website dated January 14, 2021, shows that in connection with SFO's investigation into Petrofac Limited and its subsidiaries, David Lufkin, a British national and the former global head of sales at Petrofac, pleaded guilty to three counts of bribery.
The offenses relate to corrupt offers and payments made between 2012 and 2018 to influence the award of contracts to Petrofac in the UAE worth approximately $3.3 billion, the January statements read.
Lufkin pleaded guilty to his role in offering and making corrupt payments to agents to influence the award of an EPC contract to Petrofac in 2013 and a variation to that contract awarded in 2014 on the Upper Zakum UZ750 Field Development Project, and a front-end engineering design (FEED) contract awarded to Petrofac in 2014 on the Bab Integrated Facilities Project, each located in Abu Dhabi.
"Total payments of approximately $30 million were made, or were due to be made, by Petrofac to those agents in connection with these contracts," the SFO February 2021 statement read.
In April, Adnoc terminated two contracts awarded to the Petrofac Emirates joint venture for the Dalma Gas Development Project, with Petrofac saying at the time it was working with Adnoc to "explore alternative options to deliver this project."
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