Case details
Type of claim: Investigating
Claim period: 24 Feb 2012 – 12 May 2017
Defendants: Petrofac Limited
Jurisdiction: England
Governing Law: English law
Limitation: 11 May 2023
Case summary
Petrofac is an international service provider to the oil and gas production and processing industry. The company is quoted on the London Stock Exchange and is a constituent of the FTSE 250 Index.
On 12 May 2017, the Serious Fraud Office (SFO) stated that it was “investigating the activities of Petrofac Limited, its subsidiaries, and their officers, employees and agents for suspected bribery, corruption and money laundering”.
On the 25 May 2017, Petrofac suspended Marwan Chedid as chief operating officer and put restrictions on Ayman Asfari, the chief executive.
On 6 February 2019, David Lufkin, who was Global Head of the Sales for Petrofac International Limited, pleaded guilty at Westminster Magistrates’ Court to 11 counts of bribery. The offences related to the making of corrupt offers to influence the awards of contracts to Petrofac as follows:
- in Iraq, contracts worth in excess of $730m, comprising the award of the engineering, procurement and construction (EPC) project at Badra oilfield on 24 February 2012 and the award of the operations and maintenance (O&M) project at the FAO Terminal on 14 August 2012
- in Saudi Arabia, contracts worth a total of $3.4bn, comprising two EPC projects for Petro Rabigh Phase II worth $463m, two EPC contracts at Jazan worth $1.4bn on 4 December 2012, and an EPC contract as part of Fadhili Gas Plant worth $1.56bn on 16 Nov 2015.
On 7 February 2019, Petrofac stated that the SFO had not charged any of its companies or any other employees, adding that no current board members are alleged to have acted with Lufkin. Its statement said: “Although not charged, a number of Petrofac individuals and entities are alleged to have acted together with the individual concerned.”
Petrofac International Limited is a 100% owned subsidiary of Petrofac Limited.
On 25 November 2019, the Financial Times reported that Petrofac is alleged to have maintained a false set of accounts to hide bribes to foreign government officials. The story stated this allegation has been made as part of the ongoing investigation by US regulators into Unaoil.
On 1 October 2021:
- Petrofac Limited pleaded guilty to failing to prevent former senior executives of the Petrofac group of subsidiaries (the Petrofac Group) from using agents to systematically bribe officials, to win oil contracts in Iraq, Saudi Arabia and the United Arab Emirates.
- Petrofac Limited admitted that senior executives of the Petrofac Group paid £32 million ($44 million) in bribes to corrupt the awarding of contracts worth approximately £2.6 billion ($3.5 billion).
On 4 October 2021:
- Petrofac Limited was ordered to pay confiscation of £22,836,985, they were fined over £47,197,640 and the SFO’s costs of £7 million.
- David Lufkin, Petrofac Group’s former Head of Sales, was sentenced and he received a two-year custodial sentence, which was suspended for 18 months, for committing 14 counts of bribery.
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.
Stewarts is monitoring the situation to determine whether shareholders of Petrofac Limited may have an economically viable claim against Petrofac in the English courts.
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