Petrofac has been suspended by Abu Dhabi National Oil Company (Adnoc) from participating in new tenders from the United Arab Emirates state oil and gas giant.
The move comes after a former executive of the UK oilfield services stalwart pleaded guilty in January to further bribery offences involving oil deals in the UAE worth over $3 billion.
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In a brief statement on the London Stock Exchange on Monday, Petrofac said it was notified by Adnoc on 15 March "that it has been suspended from competing for new awards until further notice".
It added: "This follows the SFO's(Serious Fraud Office's) announcement of additional pleas in January by a former Petrofac employee under the Bribery Act 2010 in relation to historic contract awards in the UAE in 2013 and 2014."
Petrofac added that it will continue to execute two engineering, procurement and construction projects for Adnoc that are currently under construction.
Shares in Petrofac began to slide immediately after the suspension was made public and were down by around 10% before 3:30pm local time on Monday.
By 4pm, shares were down around 15% and a short time later were down around 17%.
"Adnoc has stated that it recognises the long-standing nature of its relationship with Petrofac and has confirmed that its decision will be reviewed on a periodic basis," the London-headquartered company said.
"Petrofac is committed to operating at the highest standards of ethical business practice. No charges have been brought against any Petrofac Group company or any current officer or employee," the statement ended.
Historical cases
David Lufkin, previously the global head of sales for the London-listed company, in mid-January pleaded guilty at Westminster Magistrates’ Court to three further bribery offences after previously being involved in other bribery offences relating to contracts in the Middle East.
“The offences relate to corrupt offers and payments made between 2012 and 2018 to influence the award of contracts to Petrofac in the [UAE] worth approximately $3.3 billion,” the SFO said in a statement in January.
These charges were in addition to eleven charges of bribery already brought by the SFO, to which Lufkin pleaded guilty in February 2019.
The fresh bribery charges involved “offering and making corrupt payments to agents to influence the award of an engineering, procurement and construction contract to Petrofac in 2013 on the Upper Zakum UZ750 field development project, and a front-end engineering design contract awarded to Petrofac in 2014 on the Bab integrated facilities project, each located in Abu Dhabi", the SFO statement in January read.
The SFO said that total payments of approximately $30 million were made, or were due to be made, by Petrofac to those agents in connection with these contracts in the UAE.
Lufkin was involved in similar bribery offences in Iraq and Saudi Arabia, which were brought to light by the SFO in 2019.
Lufkin was involved in payments made by Petrofac to agents to secure the work on projects including a $330 million EPC contract on Iraq’s Badra oilfield, the SFO claimed in 2019.
The company was awarded the contract in February 2012.
The SFO had also alleged Lufkin offered bribes to influence variations to the first phase of the Badra EPC contract, and for the extension of the Badra operations and maintenance contract.
However, Petrofac was unsuccessful in obtaining these contracts and no payments were made to the agent.
In Saudi Arabia, the SFO alleged in 2019 that payments of approximately $45 million were made by Petrofac to win three contracts it was awarded between July 2012 and November 2015.
The SFO further alleged that corrupt offers of payments were also made to its agent for the award of other contracts at the time. However, Petrofac was unsuccessful in obtaining these contracts and no payments were made, it had added.
