The us does not arrest: charge penalties and move on
In the span of less than a month last year, the Houston-based subsidiaries of oil equipment giants Keppel Offshore & Marine and SBM Offshore both pleaded guilty to bribery charges stemming from a long-running Brazilian corruption investigation. The companies agreed to pay the U.S. Justice Department a combined $660 million (U.S.) in penalties.
Oil industry rocked by global corruption scandals
A series of sprawling corruption investigations has ensnared oil and gas corporations while examining how countries come to sign over rights to their oil and mineral deposits.
By JAMES OSBORNE
Fri., Feb. 2, 2018
WASHINGTON—It started with Brazil’s national oil company, then the clients of a consulting firm in Monaco and two of Europe’s largest oil companies, and with each revelation came new investigations involving new companies.
Big names in Houston’s energy world, such as KBR, Shell and SBM Offshore, suddenly were having to explain how they came to win drilling rights and contracts worth billions of dollars in countries such as Nigeria, Angola and Brazil.
For close to a century, oil fortunes have been made and lost in the developing world, but a series of sprawling corruption investigations has thrown a wrench into that paradigm, ensnaring oil and gas corporations around the world while putting a microscope on how countries come to sign over rights to their oil and mineral deposits.
Nations — developed and developing alike — are taking a harder line on bribes and self-dealing long swept under the rug. At the same time, digital leaks such as the Panama Papers are making public vast troves of incriminating corporate and government documents that in an earlier age might never have seen the light of day.
Such investigations have touched a multitude of industries — from telecom to technology and health care. But considering its long history operating in the developing world, none is as exposed as the oil and gas industry, which is centred in Houston and drives the Texas economy.
“I don’t want to say this is the new normal, but this should not be viewed as a high-water mark,” said Jason Varnado, a former U.S. prosecutor in Houston and now an attorney with international law firm Jones Day. “No industry operates in more high-risk markets than the energy industry.”
In the span of less than a month last year, the Houston-based subsidiaries of oil equipment giants Keppel Offshore & Marine and SBM Offshore both pleaded guilty to bribery charges stemming from a long-running Brazilian corruption investigation. The companies agreed to pay the U.S. Justice Department a combined $660 million (U.S.) in penalties.
British and American prosecutors, meanwhile, are moving ahead on an investigation into how a Monaco firm came to arrange contracts across the Middle East, Africa and Central Asia. The case has drawn in players from across the global oil industry, including the Houston firms FMC Technologies, Weatherford International and KBR, a former subsidiary of Halliburton. |
