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Agreement Signed Between SBM Offshore & Brazilian Public Prosecutor

Source: www.gulfoilandgas.com 9/1/2018, Location: South America

Following the announcement by the Company of July 26, 2018 of a Leniency Agreement with Brazilian Authorities CGU (Ministerio da Transparencia e Controladoria-Geral da Uniao– “CGU”) and AGU (Advocacia Geral da Uniao – “AGU”) and Petroleo Brasileiro S.A. (Petrobras) that allowed the Company to resume normal business activities with Petrobras, the Company has now also signed an additional agreement with the Brazilian Federal Prosecutor’s Office (Ministerio Publico Federal – “MPF”) (the Agreement).

The Agreement means that the Company has now also reached a final settlement with the MPF over alleged improper sales practices before 2012, in addition to that with the Brazilian Authorities and Petrobras. As with all such agreements signed by the MPF, the Agreement is subject to approval by the Fifth Chamber of the MPF. Earlier comments by the Fifth Chamber in 2016, when it did not approve an earlier agreement, have been addressed. As such it is anticipated that approval from the Fifth Chamber should be forthcoming.

Under the Agreement, the MPF commits to refrain from initiating new legal proceedings against the Company under the Improbity Law, Anti-Corruption Law and Public-Procurement Law in relation to the legacy issues in Brazil. The MPF and the Company will jointly request the court to formally close the Improbity Lawsuit filed by the MPF in 2017, including the associated provisional measure to secure payment of potential damages. Once approved the case will be closed and the agreement will become fully effective.

The Agreement provides – in addition to the amounts agreed in the Leniency Agreement – for the payment of an additional fine by SBM Offshore of BRL 200 million (Brazilian Reais) (approximately US$ 48 million). The additional fine is to be paid to Petrobras in instalments: an upfront payment of BRL 60 million, with seven BRL 20 million installments thereafter. This additional agreement brings the total amount of the provision established by the Company in respect of legacy issues in Brazil from US$ 299 million to US$ 347 million.

CGU, AGU and Petrobras have expressed support for this additional agreement with the MPF.

Erik Lagendijk, Chief Governance and Compliance Officer and Member of the Management Board commented: “We are pleased that following the recent agreement with Petrobras and Brazilian Authorities we now also have reached an agreement that removes the uncertainties around the remaining litigation risk over our historical legacy issues in Brazil.”

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