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Petrofac Fined $105m; Shares Rally Futher

By John Lee.

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.“

(Sources: SFO, Petrofac)

The post Petrofac Fined $105m; Shares Rally Futher first appeared on Iraq Business News.

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Iran Ready to Extend Gas Export Deal with Iraq

By John Lee.

The CEO of the National Iranian Gas Company (NIGC) has said Iran is ready to extend its gas export deal with Iraq.

Majid Chegeni, who is also the Deputy Minister of Petroleum for Gas Affairs, said:

“Our relationship with Iraq is strategic and apart from economic relations, we have deep cultural and religious relations that are very important. The more our cooperation, especially in the field of energy, the deeper and more objective these relations will be.”

(Source: NIGC)

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$100m to Support COVID-19 Vaccination in Iraq

By John Lee.

The World Bank has approved a new US$100 million project to scale up Iraq’s health sector response to the COVID-19 pandemic.

The Iraq COVID-19 Vaccination Project will support the rollout of COVID-19 vaccinations to priority population groups and strengthen the institutional systems needed to enable the safe and effective distribution and use of COVID-19 vaccine at scale.

It aims to help the country procure COVID-19 vaccines, improve its capacity to manage health care waste, and raise public awareness on the importance of vaccination against the virus.

The project builds on existing support the World Bank and other development partners have given the Government of Iraq for its COVID-19 response under the Iraq Recovery, Reform, and Reconstruction Fund (I3RF) and the Emergency Operation for Development Project.

Iraq has been one of the countries hardest hit by COVID-19 in the Middle East and North Africa (MENA) region, recording almost 2 million COVID-19 cases and more than 21,000 deaths to date.

The government began its COVID-19 vaccination campaign in March 2021 and has been able to increase coverage rapidly in the past month. More than 7 million doses of COVID-19 vaccine have been administered, with about 11% of the population having received the first dose and 7% fully immunized with two doses.

A comprehensive, well-coordinated vaccination campaign is key to a country’s future recovery from the impact of the COVID-19 pandemic on its economy and public health. The new project will play a critical role in ensuring affordable, equitable access to COVID-19 vaccines in Iraq, extending coverage to 3 million of the country’s population.

“Improved access to vaccination is needed to limit the spread of the disease and lessen the burden on the already weak health system in Iraq,” said Saroj Kumar Jha, World Bank Mashreq Regional Director. “The new project will support Iraq in its acquisition and deployment of COVID-19 vaccines, which are essential to protect lives, enable the country to reopen safely, and kickstart economic recovery.”

The Iraq COVID-19 Vaccination Project falls under the COVID-19 Strategic Preparedness and Response Program (SPRP), using a Multiphase Programmatic Approach (MPA) that was approved by the World Bank’s Board of Executive Directors in April 2020, as well as additional financing agreed to last October. It includes a I3RF grant for vaccine delivery.

The I3RF was founded in partnership with the Government of Iraq in 2018 and is funded by Germany, the United Kingdom, Canada and Sweden. It provides a platform both for financing and strategic dialogue for development and reconstruction, with a strong focus on targeted national reforms and public and private investment in socio-economic recovery and reconstruction. The fund seeks to be a strategic platform for development coordination and dialogue, and it aims to support the climate change agenda of the country, gender equality, peace building, and citizen engagement.

World Bank financing will complement activities conducted by other development partners, filling in critical gaps to ensure the deployment of vaccine is successful. The World Bank is committed to continue supporting Iraq’s efforts to address the COVID-19 pandemic and improve the resilience of its health system to future shocks.

(Source: World Bank)

The post $100m to Support COVID-19 Vaccination in Iraq first appeared on Iraq Business News.

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Iraq Oil Exports increase in September

By John Lee.

Iraq’s Ministry of Oil has announced preliminary oil exports for September of 92,422,485 barrels, giving an average for the month of 3.081 million barrels per day (bpd), up slightly from the 3.054 million bpd exported in August.

The exports from the oilfields in central and southern Iraq amounted to approximately 89,224,354 barrels, while exports from Kirkuk amounted to 2,922,857 barrels. Exports to Jordan by truck totaled 275,274 barrels.

Revenues for the month were $6.771 billion at an average price of $72.612 per barrel.

August’s export figures can be found here.

(Source: Ministry of Oil)

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Iraq discusses Oil Cooperation with Azerbaijan

By John Lee.

Iraq’s Oil Minister Ihsan Abdul-Jabbar Ismail has visited Azerbaijan to discuss cooperation between the two countries in the field of oil and gas.

Azerbaijan’s Minister of Energy, Parviz Shahbazov, said it would be possible to supply Iraqi crude oil and oil products to the world market via SOCAR, the state-owned oil and gas company of Azerbaijan, adding:

“We can assess the prospects to expand energy cooperation.”

The Ministers also exchanged opinions on Iraq’s plans for renewable energy, and on the situation in the world energy market.

(Source: Azerbaijan Ministry of Energy)

The post Iraq discusses Oil Cooperation with Azerbaijan first appeared on Iraq Business News.

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Iraq Finalises August Oil Exports

By John Lee.

Iraq’s Ministry of Oil has announced finalised oil exports for August of 94,660,239 barrels, giving an average for the month of 3.054 million barrels per day (bpd), up from the 2.918 million bpd exported in July.

The exports from the oilfields in central and southern Iraq amounted to approximately 91,655,930 barrels, while exports from Kirkuk amounted to 3,004,309 barrels.

Revenues for the month were $6.554 billion at an average price of $69.235 per barrel.

July’s export figures can be found here.

(Source: Ministry of Oil)

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Shell “in talks” to boost Iraq’s Gas Production

By John Lee.

Shell is reported to be in talks with Iraq to boost Basra Gas Company‘s capacity.

According to S&P Global Platts, BGC is planning to increase capacity for gas production from 1 billion cubic feet per day (Bcf/d) now to 1.4 Bcf/d in two years; discussions with Shell could see that increase further to 2 Bcf/d.

A statement in May from Iraq’s Ministry of Oil said that Iraq will invest $3 billion in BGC over the next five years, increasing gas production capacity from 1 Bcf/d to 1.4 Bcf/d this year, and further to 2.4 Bcf/d by 2025.

Shell is also said to be continuing negotiations with Iraq over the giant Nibras [Nebras] petrochemical plant, which was initially agreed in 2015.

More here.

(Source: S&P Global Platts)

The post Shell “in talks” to boost Iraq’s Gas Production first appeared on Iraq Business News.

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Petrofac Shares Jump following Iraq Bribery Plea Agreement

By John Lee.

Petrofac shares closed the day up more than 26 percent on Friday, after the company announced that it has reached a plea agreement with the UK Serious Fraud Office (SFO) in relation to bribery in Iraq, Saudi Arabia and the UAE.

The Company indicated guilty pleas to seven counts of failing to prevent former Petrofac group employees from offering or making payments to agents in relation to projects awarded between 2012 and 2015 in Iraq, Kingdom of Saudi Arabia and the UAE, contrary to Section 7 of the UK Bribery Act 2010. These offers or payments were made between 2011 and 2017.

It added that all employees involved in the charges have left the business.

A sentencing hearing is scheduled to take place at Southwark Crown Court commencing on Monday 27 September 2021. The Company will make a further announcement following sentencing or any adjournment.

In a statement to the markets, Group Chief Executive Sami Iskander said:

“With my new management team we are rebuilding the company into a new Petrofac that’s relevant for the future, across both traditional and new energies, built on a foundation of the highest ethical standards.”

(Sources: Petrofac, SFO)

The post Petrofac Shares Jump following Iraq Bribery Plea Agreement first appeared on Iraq Business News.

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Iraq “the Biggest Commercial Opportunity in Petroleum Today”

By John Lee.

Petrel Resources has said that “Iraq remains the biggest commercial opportunity in petroleum today.”

In the company’s Interim Statement to the markets on Wednesday, Chairman David Horgan added:

“The geology is unsurpassed.  The oil market is sharply recovering.  But contracts must be updated for effective exploration and development.”

“The focus is once again Iraq.”

The company claims to have an interest in Iraq’s Block 6 in the Western Desert, subject to ratification.

More here.

(Source: Petrel Resources)

The post Iraq “the Biggest Commercial Opportunity in Petroleum Today” first appeared on Iraq Business News.