Petrobras CEO admits SBM Offshore bribed officials

Graça Foster, CEO for state-run Petrobras oil company, gave a statement Monday (Nov. 17) confirming that Netherland-based SBM Offshore, a contractor in oil platform lease services, admitted to bribing Petrobras employees to win contracts. However, SBM has not given any details as to who paid the bribes and how much they offered. Foster said the Dutch company will no longer be eligible to bid for further contracts with Petrobras.

Petrobras started internal due diligence when the concerns emerged, but could not find evidence of violations on that occasion. But in a recent interview to clarify a delay in disclosing the company's financial statements, Graça Foster revealed that she had found compelling evidence of bribery as a result of the internal investigations back then.

“The CEO received a call and a letter where SBM said it had been told of credits to accounts in Switzerland by Public Prosecution in the Netherlands. This is overwhelming evidence outright – it's the company's own admission that it was aware of it [bribery],” said José Formigli, Petrobras Head of Exploration and Production.

As a result of this “overwhelming evidence of noncompliance,” SBM will be barred from entering into contracts with Petrobras in spite of its “outstanding delivery performance” according to Graça Foster. “We promptly told SBM that they would be ineligible to participate in any further bidding to work for us until the people who were taking bribes were identified,” she said. But she made it clear that SBM'sr eight existing contracts with Petrobras will not be suspended.

José Antônio de Figueiredo, Director of Engineering, Technology and Materials for Petrobras, added that once non-compliance allegations are proven, SBM may get suspended from further bidding to work for Petrobras for six months to two years. “This can occur in case of poor performance or inappropriate business conduct,” he said.

One of the executives investigated by Federal Police as part of Operation Car Wash, which unveiled a kickback scheme within Petrobras, told prosecutors that there was a “club” of contractors earmarked to win bids with the state-run oil company. When questioned by police, Augusto Ribeiro de Mendonça Neto, director for Toyo Setal, said he paid between $19 million and $23 million in bribes to Renato Duque, former Petrobras Director of Services, as part of the scheme.

Translated by Mayra Borges