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By John Lee.

Oil services company Petrofac has said it is "anticipating significant upside potential upon return to markets in Saudi Arabia, Iraq and the UAE".

In 2019, customers in Iraq and Saudi Arabia suspended Petrofac from bidding on new contracts, while allowing it to execute pre-existing contracts, followed by a UAE customer in 2020. This resulted from investigations into corruption involving the company.

Earlier this month, Petrofac 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.

The company today raised £199.6 million in the bond markets, part of which will be used to pay the fine.

Iraq, Saudi Arabia and the UAE accounted for 27 percent of total revenue in the period 2015-2019, prior to the first suspension, and revenue from these countries decreased to 12 percent in 2020.

(Source: Petrofac)

By John Lee.

Iraq has reportedly announced the resumption of direct flights with Saudi Arabia.

Flights were suspended nearly two years ago because of the COVID-19 crisis.

(Source: INA)

By John Lee.

The Iraqi cabinet has selected a site in Bismaya to build the new Sports City, which was gifted by King Salman bin Abdulaziz Al Saud in 2019.

Iraq's Ministry of Youth and Sports will supervise the Sports City project in coordination with the Saudi side through the Iraqi-Saudi Coordination Council, which was formed late last year.

(Source: Office of the Prime Minister)

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)

From Amwaj Media. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

Baghdad Conference goes to NYC as Iran-Saudi talks set to resume

A follow-up meeting of the recent Baghdad Conference has been held on the sidelines of the United Nations General Assembly.

As on Aug. 28 in the Iraqi capital, the gathering brought together mainly regional officials along with some European representatives.

The full report can be viewed here (registration required).

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 [Note: Subsequently postponed to Friday 1st October, and then to Monday 4th October]. 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)

By John Lee.

Iraq and Saudi Arabia agreed to work together to help streamline the flow of goods between the two countries.

Meeting at the recently-reopened border post of Arar, officials from both sides agreed to implement more efficient electronic clearance systems to reduce delays.

They will also upgrade the road connections leading to Arar.

(Sources: Iraqi Ministry of Transport, Saudi Gazette)

Saudi Minister of Transport and Logistic Services and Chairman of the Transport General Authority Eng. Saleh bin Nasser Al-Jasser and Iraqi Minister of Transport Nasser Al-Shibli signed a cooperation agreement in the maritime transport field on behalf of their respective governments.

The agreement is part of a series of actions that the Saudi-Iraqi Coordination Council implements to enhance relations between the Kingdom of Saudi Arabia and the Republic of Iraq at the strategic level and to open new aspects for cooperation in various fields.

The agreement aims at supporting the maritime transport field, which is considered one of the pillars of the economic development in the world, which requires developing the commercial maritime navigation, increasing the movement of commercial ships to transport passengers and goods, encouraging commercial exchange, facilitating the access requirements and procedures to the ports of both countries with their ships, and enhancing the exchange of expertise and technologies between marine companies, institutions and institutes in this field.

The agreement also included treatment methods for ships of both countries regarding access to their ports, their stay and departure, and in cases of emergency and marine accidents in the territorial water, where the deal also aims at offering facilitation for maritime transport companies, ships and personnel, in addition to mutual recognition of documents of ships and sailors for both countries, and coordinating positions of both countries in international maritime conferences.

(Source: SPA)

By John Lee.

On Monday, Prime Minister Mustafa Al-Kadhimi received the Saudi Minister of Commerce, Majid bin Abdullah Al Qasabi, and his accompanying delegation.

During the meeting, they discussed the development of bilateral relations between Baghdad and Riyadh, and ways to enhance cooperation in the fields of economy and investment, and to work to enhance and develop the inter-trade movement.

(Source: Govt of Iraq)

By Katherine Harvey and Bruce Riedel, for The Brookings Institution. The opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Egypt, Iraq, and Jordan: A new partnership 30 years in the making?

In April, the news that Iraq was mediating between longtime rivals Saudi Arabia and Iran captivated Middle East watchers.

Iraq's new role as a Saudi-Iran intermediary comes as the Saudis have taken concrete steps in recent years to build a meaningful relationship with their northern neighbor, such as reopening their border last November for the first time since 1990.

Yet while the new Saudi-Iraq relationship is indeed noteworthy, Iraq has simultaneously been forging a regional partnership with two other Arab states: Egypt and Jordan. Indeed, Baghdad hosted a summit in late June attended by Egyptian President Abdel-Fattah el-Sissi and King Abdullah II of Jordan.

It was the fourth time leaders of the three countries have met together since March 2019, and the first time on Iraqi soil. It was also the first visit by an Egyptian president to Iraq in more than 30 years.

The full report can be read here.