November 6, 2017
- Provision of US$238 million based on advanced discussions with
the U.S. Department of Justice ("DoJ") in relation to their
reopened investigation into legacy issues and Unaoil
- Discussions with various authorities in Brazil: not yet
resolved, complex process requiring coordination and agreement
among the multiple parties involved
History
In 2012, the Company became aware of potential
improper sales practices. In response, the Company launched an
internal investigation and self-reported the matter to the Dutch
public prosecutor and the DoJ. In 2014, the Company entered into a
settlement agreement with the Dutch public prosecutor regarding its
legacy issues in Equatorial Guinea, Angola and Brazil. At that
time, the DoJ informed the Company that it had closed its inquiry
into the matter based upon a lack of US jurisdiction, but reserved
the right to reopen the investigation if new facts came to light.
Subsequently, the Company has been in discussions with the
Brazilian authorities. At the end of 2015, various individuals were
charged by the Brazilian public prosecutor. This included one of
the Company's former employees who worked on projects in relation
to Brazil from the United States and is a U.S. citizen. Following
the release of these charges, the DoJ reopened its investigation.
The DoJ also initiated an investigation into the Company's
relationship with Unaoil.
United States
The Company is in advanced discussions with the
DoJ concerning a potential resolution of the DoJ's investigations.
Based on these investigations and the applicable U.S. statutory
rules, the DoJ has now concluded that the evidence not only
supports jurisdiction in the United States but also requires a
further penalty in the United States. Confronted with the DoJ's
conclusions and in anticipation of a final resolution, the Company
is making a provision of US$238 million.
The proposed terms under discussion reflect
confidence in the quality of the Company's compliance program and
efforts by current management.
Final resolution with the DoJ remains subject
to, amongst other matters, agreement on the terms and conditions of
the resolution, including subsequent approval thereof by the
Company's Supervisory Board.
Brazil
2016 Leniency agreement
In July 2016, the Company signed a leniency
agreement with the Federal Prosecutor's Office (Ministério Público
Federal - "MPF"), the Brazilian Ministry of Transparency, Oversight
and Control (Ministério da Transparência, Fiscalização e Controle -
"MTFC"), the General Counsel for the Republic (Advocacia Geral da
União - "AGU") and Petrobras.
Pursuant to Brazilian law and regulations,
leniency agreements entered into by the MPF are subject to review
and approval by the Fifth Chamber for Coordination and Review and
Anti-corruption ("Fifth Chamber"). Leniency agreements entered into
by the MTFC, the AGU and Petrobras are subject to review and
approval by the Federal Court of Accounts (Tribunal de Contas da
União - "TCU").
The 2016 leniency agreement was to have become
effective and binding following approval by the Fifth Chamber. The
review by the TCU was to have followed after signing and was not a
condition precedent for the effectiveness of the leniency
agreement.
In December 2016, the Higher Council of the
Fifth Chamber confirmed the decision of the Fifth Chamber of
October 2016 not to approve the 2016 leniency agreement. Since the
decision of the Higher Council, the Company, the Brazilian
authorities and Petrobras have continued discussions in order to
address the concerns raised by the Fifth Chamber.
Current situation
In light of the various competences and
approvals of the respective authorities, the Brazilian authorities
presented the Company with two separate leniency agreements: one
leniency agreement with the MPF only (the "MPF Agreement") and
another leniency agreement with the other authorities (the MTFC and
the AGU) and Petrobras (the "MTFC Agreement").
The Company has been exploring the potential
terms and conditions of these leniency agreements with the
Brazilian authorities and Petrobras. The most important elements
for the Company in the 2016 leniency agreement were that it
provided for finality regarding the Company's legacy issues in
Brazil and allowed the Company to contract new projects with
Petrobras.
The leniency agreements under discussion with
the Brazilian authorities and Petrobras would allow the Company to
secure future business with Petrobras. However, the proposed
agreements do not provide the same level of finality, both
regarding the amount of compensation payable for damages and
regarding the responsibility for the acts of the Company's agents
in Brazil. The proposed leniency agreements reference and require
payment of a civil fine and compensation for damages. The aggregate
amount does not differ materially from the amounts agreed in the
2016 leniency agreement.
During a preliminary review of the MTFC
Agreement by the TCU, the TCU indicated that it has concerns with
some of the provisions of the MTFC Agreement. These concerns relate
to inter alia the scope and the sufficiency of the amounts payable
by the Company as compensation for damages to Petrobras. The TCU
issued an injunction order suspending the signing of the MTFC
Agreement until the end of November 2017 and stated that it would
need to approve the terms and conditions of the MTFC Agreement
prior to signing. This may trigger further discussions with the
other parties involved. The Company cannot guarantee that these
parties will await the finalization of the TCU's review and any
subsequent discussions that may be required as a result.
Pursuant to its general oversight over
state-owned companies, the TCU conducts reviews regarding the
market conformity of Petrobras' contracts, including contracts with
the Company. The Company believes that its contracts were fairly
and legally agreed.
The Company confirms its commitment to close out
its legacy issues in Brazil and its willingness in principle to pay
the agreed substantial amounts. However, to enter into the leniency
agreements, the Company would need to be in a position to reach
satisfactorily closure with all Brazilian authorities and Petrobras
on all outstanding leniency issues at the same time. In view of the
current situation, the Company cannot guarantee that a satisfactory
resolution will be reached. The Company will await resolution
before participating in Petrobras-operated tenders.
Individuals
The relevant authorities in various
jurisdictions, including the DoJ, may take action against
individuals, including former executives, who have been involved in
the Company's legacy issues in the past.
Management Board comment
Chief Governance and Compliance Officer and
member of the Management Board Erik Lagendijk commented:
"The Company self-reported the issues in 2012
and has completely changed its business model and ways of working
since, as recognized by the Company's stakeholders. Although it
appears that the Company can likely reach a resolution with the DoJ
and thus make an important step towards closure of the past, it is
unfortunate that despite all efforts made, no global solution to
bring finality is currently available. We will continue to actively
seek to bring the legacy issue in Brazil to an acceptable
closure."
Conference Call
SBM Offshore has scheduled a conference call
followed by a Q&A session at 8:30 am Central European Time on
Monday, November 6, 2017.
The call will be hosted by Bruno Chabas (CEO),
Philippe Barril (COO), Erik Lagendijk (CGCO) and Douglas Wood
(CFO). Interested parties are invited to listen to the call
by dialing +31 (0) 20 531 5851 in the Netherlands, +44 (0) 20 3365
3210 in the UK or +1 866 349 6093 in the US.
A replay will be available shortly after the end
of the conference call. Interested parties can listen to the replay
by dialing +31 (0) 20 530 0220 and using access code 322938# until
December 6, 2017.
Corporate Profile
SBM Offshore N.V. is a listed holding company
that is headquartered in Amsterdam. It holds direct and indirect
interests in other companies that collectively with SBM Offshore
N.V. form the SBM Offshore group ("the Company").
SBM Offshore provides floating production
solutions to the offshore energy industry, over the full product
life-cycle. The Company is market leading in leased floating
production systems with multiple units currently in operation and
has unrivalled operational experience in this field. The Company's
main activities are the design, supply, installation, operation and
the life extension of Floating Production, Storage and Offloading
(FPSO) vessels. These are either owned and operated by SBM Offshore
and leased to its clients or supplied on a turnkey sale basis.
As of December 31, 2016, Group companies employ
approximately 4,750 people worldwide. Full time company employees
totaling c. 4,250 are spread over five regional centers, ten
operational shore bases and the offshore fleet of vessels. A
further 500 are working for the joint ventures with several
construction yards. For further information, please visit our
website at www.sbmoffshore.com.
The companies in which SBM Offshore N.V.
directly and indirectly owns investments are separate entities. In
this communication "SBM Offshore" is sometimes used for convenience
where references are made to SBM Offshore N.V. and its subsidiaries
in general, or where no useful purpose is served by identifying the
particular company or companies.
The Management BoardAmsterdam, the Netherlands,
November 6, 2017
Financial Calendar |
Date |
Year |
Trading Update 3Q 2017 - Press Release |
November 8 |
2017 |
Full-Year 2017 Earnings - Press Release |
February 8 |
2018 |
Annual General Meeting of Shareholders |
April 11 |
2018 |
Trading Update 1Q 2018 - Press Release |
May 10 |
2018 |
Half-Year 2018 Earnings - Press Release |
August 9 |
2018 |
Trading Update 3Q 2018 - Press Release |
November 15 |
2018 |
For further information, please contact:
Investor RelationsBert-Jaap
DijkstraInvestor Relations Director
Mobile
NL:Mobile MC: |
+31 (0)
6 2114 1017+33 (0) 6 4391 9302 |
Telephone: |
+31 20
236 3222 |
E-mail: |
bertjaap.dijkstra@sbmoffshore.com |
Website: |
www.sbmoffshore.com |
Media Relations Vincent KempkesGroup
Communications Director
Telephone: |
+31 (0)
20 2363 170 |
Mobile: |
+31 (0)
6 25 68 71 67 |
E-mail: |
vincent.kempkes@sbmoffshore.com |
Website: |
www.sbmoffshore.com |
Disclaimer
This press release contains inside information
within the meaning of Article 7(1) of the EU Market Abuse
Regulation. Some of the statements contained in this release
that are not historical facts are statements of future expectations
and other forward-looking statements based on management's current
views and assumptions and involve known and unknown risks and
uncertainties that could cause actual results, performance, or
events to differ materially from those in such statements. Such
forward-looking statements are subject to various risks and
uncertainties, which may cause actual results and performance of
the Company's business to differ materially and adversely from the
forward-looking statements. Certain such forward-looking statements
can be identified by the use of forward-looking terminology such as
"believes", "may", "will", "should", "would be", "expects" or
"anticipates" or similar expressions, or the negative thereof, or
other variations thereof, or comparable terminology, or by
discussions of strategy, plans, or intentions. Should one or more
of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially
from those described in this release as anticipated, believed, or
expected. SBM Offshore NV does not intend, and does not assume any
obligation, to update any industry information or forward-looking
statements set forth in this release to reflect subsequent events
or circumstances. Nothing in this press release shall be deemed an
offer to sell, or a solicitation of an offer to buy, any
securities.
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