In connection with the UK Serious Fraud Office (SFO)’s ongoing investigation into Petrofac Limited and its subsidiaries (“Petrofac”), on 6 February 2019 David Lufkin, 51, a British national, and previously Global Head of Sales for Petrofac International Limited, pleaded guilty at Westminster Magistrates’ Court to eleven counts of bribery, contrary to sections 1(1) and 1(2) of the Bribery Act 2010.

These offences relate to the making of corrupt offers to influence the award of contracts to Petrofac worth in excess of USD $730 million in Iraq and in excess of USD $3.5 billion in Saudi Arabia.

The charges included the following:

Payments of approximately USD $2.2 million were ultimately made by Petrofac to two agents in respect of a USD $329.7 million Engineering, Procurement and Construction (“EPC”) contract on the Badra oilfield in Iraq (the “Badra Phase One EPC contract”) awarded to Petrofac in February 2012.

Corrupt offers of payments were also made to an agent to influence the award of contract variations to the Badra Phase One EPC contract, and for the extension of the Badra Operations and Maintenance (“O&M”) contract.  Petrofac was unsuccessful in obtaining these contracts and no payments were made to the agent.

  • Fao [Faw] Terminal, Iraq

Payments of approximately USD $4 million were ultimately made by Petrofac to an agent in respect of an O&M contract on the Fao Terminal project in Iraq (the “Fao Terminal O&M contract”).  The Fao Terminal O&M contract, awarded to Petrofac in August 2012, together with yearly extensions awarded in 2013, 2014 and 2015, was worth approximately USD $400 million to Petrofac.

  • Saudi Arabia

Payments of approximately USD $45 million were made by Petrofac to its agent in respect of the following contracts awarded to Petrofac in Saudi Arabia, between July 2012 and November 2015:

  • Payments of approximately USD $5.8 million were ultimately made by Petrofac to its agent in respect of EPC contracts for the Petro Rabigh Phase II Petrochemical Expansion Project awarded in July 2012 and worth approximately USD $463 million;
  • Payments of approximately USD $21.4 million were ultimately made by Petrofac to its agent in respect of EPC contracts for Jazan Refinery and Terminal Project awarded in December 2012 and worth approximately USD $1.7 billion; and
  • Payments of approximately USD $19.5 million were ultimately made by Petrofac to its agent in respect of the EPC contract for a sulphur recovery plant as part of the Fadhili Gas Plant Project awarded in November 2015 and worth approximately USD $1.56 billion.

Corrupt offers of payments were also made to its agent for the award of other contracts at the time. Petrofac was unsuccessful in obtaining these contracts and no payments were made to its agent.

David Lufkin will be sentenced at a later date.

The SFO’s investigation into Petrofac’s use of agents in multiple jurisdictions, including Iraq and Saudi Arabia, is ongoing.

Individuals with information potentially relevant to this investigation are encouraged to contact the SFO through our secure and confidential reporting channelWhen providing information please quote ‘Petrofac Investigation’.  Please note that it would be of particular assistance if you could provide your contact details for any further queries or questions that we may have.

(Source: UK SFO)

In connection with the UK Serious Fraud Office (SFO)’s ongoing investigation into Petrofac Limited and its subsidiaries (“Petrofac”), on 6 February 2019 David Lufkin, 51, a British national, and previously Global Head of Sales for Petrofac International Limited, pleaded guilty at Westminster Magistrates’ Court to eleven counts of bribery, contrary to sections 1(1) and 1(2) of the Bribery Act 2010.

These offences relate to the making of corrupt offers to influence the award of contracts to Petrofac worth in excess of USD $730 million in Iraq and in excess of USD $3.5 billion in Saudi Arabia.

The charges included the following:

Payments of approximately USD $2.2 million were ultimately made by Petrofac to two agents in respect of a USD $329.7 million Engineering, Procurement and Construction (“EPC”) contract on the Badra oilfield in Iraq (the “Badra Phase One EPC contract”) awarded to Petrofac in February 2012.

Corrupt offers of payments were also made to an agent to influence the award of contract variations to the Badra Phase One EPC contract, and for the extension of the Badra Operations and Maintenance (“O&M”) contract.  Petrofac was unsuccessful in obtaining these contracts and no payments were made to the agent.

  • Fao [Faw] Terminal, Iraq

Payments of approximately USD $4 million were ultimately made by Petrofac to an agent in respect of an O&M contract on the Fao Terminal project in Iraq (the “Fao Terminal O&M contract”).  The Fao Terminal O&M contract, awarded to Petrofac in August 2012, together with yearly extensions awarded in 2013, 2014 and 2015, was worth approximately USD $400 million to Petrofac.

  • Saudi Arabia

Payments of approximately USD $45 million were made by Petrofac to its agent in respect of the following contracts awarded to Petrofac in Saudi Arabia, between July 2012 and November 2015:

  • Payments of approximately USD $5.8 million were ultimately made by Petrofac to its agent in respect of EPC contracts for the Petro Rabigh Phase II Petrochemical Expansion Project awarded in July 2012 and worth approximately USD $463 million;
  • Payments of approximately USD $21.4 million were ultimately made by Petrofac to its agent in respect of EPC contracts for Jazan Refinery and Terminal Project awarded in December 2012 and worth approximately USD $1.7 billion; and
  • Payments of approximately USD $19.5 million were ultimately made by Petrofac to its agent in respect of the EPC contract for a sulphur recovery plant as part of the Fadhili Gas Plant Project awarded in November 2015 and worth approximately USD $1.56 billion.

Corrupt offers of payments were also made to its agent for the award of other contracts at the time. Petrofac was unsuccessful in obtaining these contracts and no payments were made to its agent.

David Lufkin will be sentenced at a later date.

The SFO’s investigation into Petrofac’s use of agents in multiple jurisdictions, including Iraq and Saudi Arabia, is ongoing.

Individuals with information potentially relevant to this investigation are encouraged to contact the SFO through our secure and confidential reporting channelWhen providing information please quote ‘Petrofac Investigation’.  Please note that it would be of particular assistance if you could provide your contact details for any further queries or questions that we may have.

(Source: UK SFO)

By John Lee.

Iraq’s National Investment Commission (NIC) has included the “Grand Port of Al Faw” in its list of major strategic projects to be presented during the Kuwait International Conference for Iraq Reconstruction, to be held in Kuwait from 12th to 14th February:

Project cost: $6 billion

Location: Basra

Design capacity:

  • Phase one 2018: containers: 24 million ton/year, unpacked materials/ 24million ton/year
  • Phase two 2028: containers: 40 million ton/year, unpacked materials/ 32 million ton/year
  • Phase three 2038: containers: 70 million ton/year, unpacked materials/ 44 million ton/year

The project includes:

  • Eastern breakwater 8km
  • Western breakwater 15km
  • Two lines for containers berth 3.5km each 12 berth to each line total 24 containers berth and area for containers storage.
  • 13 Berths for unpacked materials (grains, cement..etc.) 3.5km with conveyor belts
  • Berths for Oil products export and import (outside the port basin)
  • Roads and railways
  • Area for buildings and trucks (around 4km²)
  • Navigational channel 30km length, 17m depth.
  • Berths for various goods 4.5km (22berths)
  • industrial zone (approximately 8.5km²)
  • depth in the port basin is 15-17 m

The full 46-page document can be downloaded here.

(Source: NIC)

By John Lee.

Iraq is reportedly planning to sell shares in the $1.3-billion Grand Faw container port to the public.

The head of the Basra provincial council, Sabah Al-Bazooni, told Bloomberg Business that the local government in Basra will seek permission from Baghdad in the coming days to set up a holding company to sell the shares; Iraq has banned the holding company structure since the Saddam Hussein era.

He added that the Council wants to list the holding company on the Iraq Stock Exchange, with the public shares representing a 25 percent stake, local government owning 26 percent, and foreign investors 49 percent.

The council is in talks with American and Chinese companies with a view to possible investment.

The project was first proposed in 2011 on a much larger scale that included an oil export platform, and with an estimated cost of $17 billion, but the subsequent collapse in the price of oil has caused it to be scaled back. Current planss are for 25 to 30 container platforms.

Plans for the port have led to tensions with neighboring Kuwait, which is building its own ‘Mubarak Al-Kabeer’ container port nearby; Iraq had expressed concern that the Kuwaiti port may hamper may restrict access to Grand Faw.

(Source: Bloomberg Business)

Ministry of Transport has announce the investment opportunity of constructing the Major Port of Faw (Al Faw Grand Port) according to investment law No. 13 for the year 2006, amended and its regulations.

DESCRIPTION

Project location: Faw Peninsula, Abdullah Khor beach, South of Iraq

Project total area: 40 thousand donum

Port area: 54 KM²

Designed Capacity:

  • Container terminal of 16 km length with total capacity of 25 million container/year
  • Bulk terminal of 5 km length with total capacity of 55 million ton/year
  • General cargo terminal of 4 km length with total capacity of 4 million ton/ year
  • Oil derivatives terminal of 6 km length with total capacity of 230 thousand barrel/ day

Note: the port is designed for oil products, commercial and industrial purpose but not for crude oil

Cost of project:

Total cost of the project is 7 billion Euros

  • Eastern and western wave brakes phase have been funded from the general budget with total amount of 720,000,000 Euros
  • The total cost of the first phase that make the port ready to operate is 2,370,000,000 Euros

Note: the land is already allocated for the project

Interested investors are required to submit their offers to the investment section in the ministry of transport or the project management office in Basra either directly by hand or through the emails shown below with enclosing the following documents:

  • Interest letter
  • Introductory profile of the investing firm
  • A statement of the financing plan and its sources
  • Project plan mechanism of running the project

Within 60 days from the date of publishing this announcement, applications shall be technically and financially evaluated, while the finally elected appliers shall be required to submit a 5 million $ letter of credit as a condition to start negotiations to ensure seriousness.

Investment section: investment@motrans.gov.iq

Project management office: fawport@scp.gov.iq

(Source: NIC)

Al Faw Grand Port 1 (NIC, Technital)

By John Lee.

Iraq’s Transport Minister has said that companies from the UAE, Iran, Turkey and China have offered to invest $7.4 billion dollars (8.6 trillion Iraqi dinars) for the development of the Grand Faw (Grand Fao) port project.

Baqir Al Zubeidi told al-Forat news agency that the investment would cover the construction of quays and other facilities at the port, as well as “residential and industrial cities.

The interested companies have not been named.

(Source: Emirates 24|7)

By John Lee.

Iraq has reportedly invited global investors to bid for its multi-billion-dollar Grand Faw port project.

The Ministry of Transport put the project’s total cost at around $6.5 billion (7.6 trillion Iraqi dinars), adding that only “serious and financially able” companies can bid.

The port has a planned capacity of around 99 million tonnes per year, and will have a 39km container quay and another 2km berth, besides a container warehouse with an area of more than one million square metres.

(Source: Emirates 24|7)

By John Lee.

Iraq has reportedly invited global investors to bid for its multi-billion-dollar Grand Faw port project.

The Ministry of Transport put the project’s total cost at around $6.5 billion (7.6 trillion Iraqi dinars), adding that only “serious and financially able” companies can bid.

The port has a planned capacity of around 99 million tonnes per year, and will have a 39km container quay and another 2km berth, besides a container warehouse with an area of more than one million square metres.

(Source: Emirates 24|7)

By John Lee.

Iraqi Transport Minister Baqr Jabr Al-Zubeidi (pictured) has said that Iraq is considering seeking foreign investors to fund the multi-billion-dollar Grand Faw [Grand Fao] port project.

Emirates 24/7 quotes the Minister as saying that the transport ministry is unable to execute the $6-billion (7-trillion-Iraqi-dinar) project, and is considering awarding the project “on an investment basis.

He added that some foreign companies have already expressed interest in investing in this project.

To date, only part of a breakwater for the project has been completed, following “a big delay in the execution of that phase of the project.” Iraq Businesses News understands that this contract was awarded to the Greek company Archirodon.

Italian firm Technital has prepared the designs for the port, which will have a capacity of 99 million tonnes per year, a 39-km container quay and another 2-km berth, in addition to a container warehouse of more than one million square metres.

(Source: Emirates 24/7)