Second former Unaoil executive sentenced for bribery in post-occupation Iraq

Stephen Whiteley, Unaoil‘s former territory manager for Iraq, has today become the second Unaoil executive to be sentenced for paying over $500,000 in bribes to secure a $55m contract to supply offshore mooring buoys. He was sentenced by HHJ Beddoe to 3 years’ imprisonment.

This follows the sentencing of his co-conspirator Ziad Akle on 23 July 2020, another former Iraq territory manager for Unaoil, upon whom HHJ Beddoe imposed a sentence of five years’ imprisonment.

The two men conspired with others to pay considerable bribes to public officials at the South Oil Company to secure contracts for Unaoil and its clients to construct offshore mooring buoys in the Persian Gulf. The new buoys formed part of a series of state-run projects designed by the government of post-occupation Iraq to boost its economy by rebuilding the country’s oil industry and thereby expanding its oil export capacity.

A jury at Southwark Crown Court found Stephen Whiteley guilty on one count of conspiracy to give corrupt payments. In the same trial, his co-conspirator, Ziad Akle, was found guilty on two counts of conspiracy to give corrupt payments.

SFO Director Lisa Osofsky said:

Faced with a country in desperate need of reconstruction following years of military occupation, Stephen Whiteley, Ziad Akle and their co-conspirators saw an opportunity to swindle the fledgling state for their own ends.

“The flagrant greed and callous criminality exhibited by these men undermines the reputation and integrity of British business on the international stage. We will not cease in our mission to bring such people to justice.

The convictions followed the guilty pleas of co-conspirator Basil Al Jarah who, in July 2019, admitted five offences of conspiracy to give corrupt payments. Al Jarah, who admitted to paying bribes totalling over $6million to secure contracts worth $800m for the supply of oil pipelines and offshore mooring buoys, is due to be sentenced at Southwark Crown Court on 8 October 2020.

(Source: UK SFO)

By John Lee.

The UK’s Serious Fraud Office (SFO) has secured convictions against two former oil executives who conspired to give corrupt payments to secure contracts in Iraq.

A jury at Southwark Crown Court found Ziad Akle guilty on two counts and Stephen Whiteley guilty on one count of conspiracy to give corrupt payments. The convictions follow the guilty pleas of co-conspirator Basil Al Jarah who, in July 2019, admitted five offences of conspiracy to give corrupt payments.

In the years of reconstruction following the overthrow of Saddam Hussein in 2003, the three men conspired with others to pay bribes to public officials at the Iraqi South Oil Company (SOC) and, and in Basil Al Jarah’s case the Iraqi Ministry of Oil, to secure oil contracts for Unaoil and its clients.

The post-occupation Iraqi government had commissioned the South Oil Company to run projects as part of a “Master Plan” to rebuild Iraq’s oil industry and thereby expand the country’s oil export capacity. This included the installation of offshore mooring buoys and new oil pipelines.

To ensure Unaoil benefitted from these state-run projects, the defendants and co-conspirators conspired to bribe public officials at the South Oil Company and Ministry of Oil to secure contracts for Unaoil and its clients SBM Offshore. Basil Al Jarah also conspired to bribe public officials at the South Oil Company and the Ministry of Oil to secure contracts for Unaoil and its client Leighton Offshore.

Basil Al Jarah admitted to paying bribes totalling over $6million to secure contracts worth $800m for the supply of oil pipelines and offshore mooring buoys. Ziad Akle and Stephen Whiteley were found guilty of paying over $500,000 in bribes to secure the $55m contract for the offshore mooring buoys.

SFO Director Lisa Osofsky said:

These men dishonestly and corruptly took advantage of a government reeling from dictatorship and occupation, and trying to reconstruct a war-torn state. They abused the system to cut out competitors and line their own pockets.

“It is our mission to pursue and bring to justice those who use criminal means to weaken the integrity of business.

The SFO would like to thank the Australian Federal Police, the French Parquet National Financier, the Police Judiciaires of the Principality of Monaco, the Fiscal Information and Investigation Service (FIOD) of the Netherlands, the United States Department of Justice, Greater Manchester Police, the Metropolitan Police, the National Crime Agency and West Mercia Constabulary for their valuable assistance in this case.

The men are due to be sentenced on 22 and 23 July 2020.

More here.

(Source: UK SFO)

By John Lee.

Zubair oilfield has reportedly reached a production level of 500,000 barrels of crude oil per day (bpd).

According to Business Korea, Kogas made the announcement on Thursday, adding that its “second-stage goal” is 700,000 bpd.

The project is being developed by Eni (32.81%), Kogas (18.75%), Maysan Oil Company (25%), and South Oil Company (23.44%). Occidental had a 23.44 percent share in the field, but relinquished it to the state-owned South Oil Company in October 2016.

(Source: Business Korea)

By John Lee.

Oil services firm TechnipFMC (TFMC) has agreed to pay $296 million to resolve allegations that the company paid bribes in Brazil and Iraq.

TFMC is the product of a 2017 merger between two predecessor companies, Technip S.A. and FMC Technologies, Inc..

The admissions and court documents establish that beginning by at least 2008 and continuing until at least 2013, FMC conspired to violate the US’s Foreign Corrupt Practices Act (FCPA) by paying bribes to at least seven government officials in Iraq, including officials at the Ministry of Oil, the South Oil Company (SOC) and the Missan Oil Company (MOC), through a Monaco-based intermediary company in order to win secure improper business advantages and to influence those foreign officials to obtain and retain business for FMC Technologies in Iraq.

(Source: US Justice Dept)

By John Lee.

Shell has reportedly announced that the Basrah Gas Company (BGC) has taken a “final investment decision (FID)” on its growth programme, which will increase BGC’s capacity by 40 percent.

According to Oil and Gas Middle East, the decision was taken with the support of all BGC’s shareholders: South Gas Company (SOC), Shell and Mitsubishi.

BGC captures flared gas from the Rumaila, West Qurna 1 and Zubair oilfields, converting it into dry gas for power generation and liquids for the domestic market and for exports.

At the heart of the new development is the Basrah Natural Gas Liquids (Basrah NGL) project; a 400 million standard cubic feet per day greenfield gas processing plant at Ar Ratawi.

More here.

(Source: Oil and Gas Middle East)

By Adnan Abu Zeed for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News.

Floating Oil Island will handle Iraq’s expected Spurt in Exports

The South Oil Co. (SOC), based in Basra, Iraq, will establish a floating oil island off the coast of al-Faw Peninsula to increase its export capacity by as many as 2 million barrels a day.

The company announced the project June 14 in anticipation of a surge in Iraqi oil exports to reach 5-6 million barrels per day. Indeed, OPEC on June 23 approved an increase in crude oil output to meet growing demand.

Hamzah al-Jawahiri, an Iraqi Oil Ministry consultant, explained that Basra province has five floating terminals overlooking the Arab Gulf for commercial work and two fixed offshore terminals at Khor al-Amiyah and al-Basra dedicated to loading about 80% of Iraq’s oil exports.

He told Al-Monitor, “All of these terminals require technical and administrative staff working around the clock. The ministry noted the need for more flexibility, as work will double in the future with the increase in oil and oil derivatives output. This requires additional technical, logistical and human support that can be provided by the oil island project near the seven Iraqi terminals. The project will facilitate shift work and the delivery of services with no interruption caused by [outside] emergency disruptions, human errors or terminal platforms oil spills.”

Jawahiri revealed that the island will include a spare-parts warehouse for all equipment and pumps, in addition to civil protection and technical services teams, as well as comfortable and modern accommodations for workers. “The floating island will spare Iraq work delays due to possible failures,” he said. “It will save time when it comes to oil export and prevent any emergency crisis caused by the disruption of any of the pumps. Recently, Iraq has paid delay penalties of about 300 million Iraqi dinars [about $252,300].”

He said the island will provide storage capacity for oil derivatives, black oil and refinery waste. “The island is linked to jetties and will provide a ready alternative in the event of disruption of any of the seven terminals.”

A source in the oil company’s media office told Al-Monitor, “The project will … also provide other services, such as anchoring and launching oil tankers and ensuring their technical and logistical support. Tankers will be filled with oil stored on the island in sufficient quantities.”

Jawahiri said a contract has been awarded to a Dutch company regarding the island project, including a preliminary agreement, but he provided no further details other than to say discussions are ongoing about the completion period and expected costs.

However, Alaa al-Yasiri, the director general of the State Organization for Marketing of Oil (SOMO), told Al-Monitor, “The contract is expected to be signed in the first quarter of 2019, with operation at partial capacity set for the first quarter of 2022. All services will be provided in the fourth quarter of 2022.”

He added, “Iraq is in dire need of expanding its export outlets. Its services must be in line with modern technology, and it must be able to cope with the potential oil and oil derivatives increase. SOMO’s new plans include joint projects with Asian companies to invest in the continent’s vast market. The Asian market consumes 60% of Iraqi oil exports. … The Ministry of Oil wants to turn SOMO into a profit-earning company. The floating oil island will help achieve this.”

Oil Ministry spokesman Assem Jihad said the project coincides with plans to build a national tanker fleet to transport oil and oil derivatives. “It is also in line with plans to restore the capabilities of the Iraqi Oil Tankers Co. to transport crude oil and oil derivatives to all parts of the world.”

Jihad said the island will help Iraq transfer oil to consumers via four giant tankers. “Three other tankers will be added at later stages,” he said.

Some experts worry about the coming increase in oil output. Oil projects expert Mohammed Zaki Ibrahim told Al-Monitor, “Experiences proved that sporadic increases in crude oil output offered for sale on global markets does not serve the Iraqi economy. Increasing exports above 3 million or 4 million barrels per day will harm Iraq gravely and deny it any opportunity to develop other resources. This also will deplete oil resources in the south.”

Meanwhile, Iraq urgently needs financial resources, with its deteriorating economy and a suffering agriculture sector. The floating island will provide hundreds of jobs, limit export delays and reduce the cost of transporting oil and derivatives.

Russia’s Lukoil has signed contracts with the state-owned Iraqi Oil Exploration Company to carry out seismic surveys at the Eridu field in Block 10, and also at Block 10’s southern and central parts, previously not part of the survey.

The scope of appraisal works at Eridu field includes a 3D seismic survey of 983 square kilometers to update the extension of the field and its geological structure.

At Block 10, 2D seismic acquisition of the southern and central parts is planned to be accomplished over an area of 3,500 linear kilometers to ensure the mapping of targets for prospect drilling.

The approved geological exploration plan for Eridu field envisages the drilling of additional appraisal wells on a mid-term horizon.​

Block 10, covering 5,600 square kilometers, is located in the governorates of Dhi Qar and Muthanna, 120 kilometers west of Basra. The interests in the project are: Lukoil – 60% (operator), Inpex Corporation (Japan) – 40%.

The Iraqi party to the agreement is represented by the state-owned South Oil Company (SOC).

The drilling of the first exploration well, Eridu-1, in February of 2017 led to the discovery of a major oilfield. Preliminary data indicate it is the most significant discovery in Iraq for the past 20 years.

The drilling of the second and third wells confirmed the field’s earlier assumed geological model.Block 10, covering 5,600 square kilometers, is located in the governorates of Dhi Qar and Muthanna, 120 kilometers west of Basra.

(Source: Lukoil)

Petrofac’s Engineering & Production Services (EPS) division has secured an award worth US$160 million from Basra Oil Company (BOC), previously known as South Oil Company (SOC), for its Iraq Crude Oil Export Expansion Project (ICOEEP).

The new two-year extension reflects Petrofac’s continued delivery focus and five-year track record as the incumbent operations and maintenance service provider.

The facility, which is responsible for a significant proportion of Iraq’s oil export, is located 60 kilometres (km) offshore the Al Fao Peninsula in Southern Iraq. It comprises a central metering and manifold platform and four Single Point Moorings (SPMs) which facilitate oil export onto awaiting crude carrier tankers.

In addition, Petrofac is responsible for almost 300 km of subsea pipelines,1800 metres of subsea hose infrastructure and a marine spread comprising 14 vessels.

Mani Rajapathy, Managing Director, Engineering & Production Services East, said:

“We are delighted to continue with our role in support of this key crude export facility. Since the start of our involvement in 2012, we have exported more than 2.2 billion barrels of oil while retaining an impeccable safety record. We have also remained focused on adding value for our client through the deployment of innovative and differentiated solutions.”

Ihsan Ismaael, Director General, Basra Oil Company, said:

“Petrofac is a key partner for BOC. The team has supported us over the last five years to significantly increase export from the ICOEEP facility and we look forward to continuing our relationship into 2019.”

(Source: Petrofac)

France’s Airbus has delivered the final two of four helicopters from the H145 family ordered by the Iraq Ministry of Oil.

The contract with the South Oil Company (SOC), a government owned company of the Iraqi Ministry of Oil, was signed in June 2014.

The Iraqi Ministry of Oil has selected Airbus as its helicopter provider for its aviation department.

The aircraft will be mainly operated from Baghdad and in the province of Basrah, supporting a variety of missions including surveillance, EMS and Passenger Transport.

(Source: Airbus)

Petrofac has secured a series of contract awards worth more than US$70 million for engineering, operations and maintenance services in Iraq.

Petrofac’s Engineering and Production Services’ (EPS) East business secured the awards during the first quarter of 2017 with two major International Oil Companies and the South Oil Company (SOC).

Petrofac has been providing services in Iraq since 2010 and has developed a significant track record for helping our clients to unlock value from their onshore and offshore operations. Featuring prominently in the mix are awards in region for operations and maintenance and a new brownfield scope for engineering and procurement services.

In addition, the company has been awarded new scopes from South Oil Company. This includes the installation of offtake facilities and a mooring system for an additional Single Point Mooring. This additional scope builds on the company’s six-year tenure as the provider of operations and maintenance for the offshore international crude oil export expansion production facility.

Mani Rajapathy, Managing Director, Engineering & Production Services East, said:

“We’re delighted to have made such a positive start to 2017, securing important awards with key clients in one of our core countries.

“There has recently been a considerable shift in the wider region’s market dynamics and consequently I believe these awards reflect our clients’ continued confidence in our ability to deliver cost-effectively and in line with their quality requirements.

“Over the coming months we will focus on effective deployment of our operations, engineering and projects’ activities across the contracts to enable our clients to unlock maximum value from their oil and gas assets.”

(Source: Petrofac)