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Friday, June 21, 2024

More firms tied to Petrobras scandal

The huge corruption case swirling around Brazilian oil company Petrobras is being called the world’s largest, and increasing numbers of Norwegian companies seem to be getting tangled up in it. Norwegian bosses mostly claim no knowledge of any bribes being paid, but investigations are underway on several fronts.

Sevan Marine's rig deals with Petrobras are not the only business transactions with the corruption-embroiled Brazilian company that are sounding alarms. Several other Norwegian companies are also having to investigate their own transactions because of suspected bribery. PHOTO: Sevan Marine
Sevan Marine’s rig deals with Petrobras are not the only business transactions with the corruption-embroiled Brazilian company that are sounding alarms. Several other Norwegian companies are also having to investigate their own transactions because of suspected bribery. PHOTO: Sevan Marine

Newspaper Dagens Næringsliv (DN) reported on Monday that the latest company feeling a need to probe suspected or unwitting involvement in the Petrobras scandal is Akastor, which was spun off from the large Norwegian oil supply company Aker Solutions in 2014. It’s now run by Kristian Monsen Røkke, son of the wealthy self-made Norwegian industrialist controlling Aker Solutions, Kjell Inge Røkke.

In addition to new questions tied to payments made by an Akastor subsidiary, both criminal and internal investigations already are underway regarding the involvement of another large Norwegian company, Sevan Marine of Arendal, with Petrobras. DN reported that other Norwegian firms faced with questions about their own dealings with Petrobras include LMG Marin of Bergen, Subsea 7 controlled by London-based Kristian Siem and Rolls-Royce Marine.

Big business in Brazil
Norwegian companies as a whole have invested an estimated NOK 175 billion (USD 20 billion) in Brazilian ventures, a volume that has prompted various Norwegian government ministers and members of the royal family to make a string of officials trips to Brazil in recent years. Monica Mæland, Norway’s current trade minister, was in Brazil just this fall with Crown Prince Haakon and a large Norwegian business delegation, officially to enhance ties with Brazilian companies. They arrived, however, in a country plagued by political chaos, corruption allegations, ill effects of the dive in oil prices and high unemployment rates.

“This is a country in a critical situation,” Mæland told DN. “One main reason is the corruption which has been and still is a major problem, first and foremost at Petrobras, combined with the economic downturn in the oil and gas industry.”

(From left): Ola Borten Moe, Crown Prince Haakon and Statoil CEO Helge Lund visiting the Peregrino oil field off Brazil. Environmentalists think Moe has been favouring oil over other sources of energy. PHOTO: Statoil
Norway’s Crown Prince Haakon (center) has made several trips to Brazil in recent years, often in the company of various Norwegian government ministers. This trip in 2011 was made with then-Oil Minister Ola Borten Moe (left) and Statoil’s CEO at the time, Helge Lund, visiting the Peregrino oil field off Brazil. The crown prince was back in Brazil this autumn, but didn’t want to comment on the massive corruption case against Petrobras. PHOTO: Statoil

Crown Prince Haakon, who traveled with Mæland, told DN that he was “aware there’s a case” going on, but he seemed keen to downplay it: “It’s nothing we’re making an issue about on this trip, and it’s not something I bring up or comment on in my meetings. That’s dealt with at other levels and in other arenas. We have a positive focus on what we can drum up.”

For growing numbers of companies, their involvement in Brazil is no longer positive at all. On Monday, DN reported that offshore investment company Akastor is now launching its own international corruption investigation. It comes after transactions involving an Akastor subsidiary, Fjords Processing, were found on an account in Monaco that belongs to a jailed Petrobras executive, Jorge Luiz Zelada.

“Fjords Processing has no knowledge of, or been accused of doing anything illegal,” Tore Langballe, communications director at Akastor, told DN. “Nevertheless the company, in cooperation with external advisers and its owner, Akastor, launched an internal investigation to examime this more closely.”

DN reported that two payments totaling USD 93,712.50 were found on Zelada’s account from 2007, marked P54 and KPS. P54 is the name of a floating production vessel built at the Jurong shipyard in Singapore, while KPS has been interpreted as an abbreviation for Aker Kværner Process Systems, which is now part of Akastor’s subsidiary Fjord Processing. It received several jobs as a subcontractor on the P54 ship. DN said it was not known who transferred the payments to Zelada’s account.

Zelada was, until July 2 of this year, head of international operations for Petrobras with responsibility for international negotiations. He was arrested last summer in connection with the corruption case known as Lava Jato, which involves an alleged cartel made up of representatives of some of Brazil’s largest companies who swindled Petrobras and controlled bidding for jobs by paying bribes to politicians and employees of Petrobras.

More alarms ringing
DN published a 10-page article just before Christmas on the alleged bribery at Petrobras, which also has raised alarms at LMG Marin of Bergen, which did business through an arrested agent and ship broker and is owed around NOK 100 million. Sevan Marine is under investigation for its dealings with a Petrobras agent, and questions have also risen around “solid” payments made by the Kristian Siem-controlled company Subsea 7 to another Brazilian agent. Siem himself told DN that “we are not accused of anything and are not aware of Subsea 7 … doing anything illegal. It is important for me to stress that Subsea 7 has zero tolerance for corruption.” Siem claimed that all work through agents is subject to a “due diligence” process and that agents are required to follow the laws of the countries where they operate.

Yet another Norwegian company, Rolls-Royce Marine, faces questions around the dealings its parent company in the UK had with the same agent, while one Petrobras director has claimed he personally received payments from Rolls-Royce. “We can confirm that we are cooperating with authorities in Brazil in connection with their investigations,” Anette Bonnevie Wollebæk of Rolls-Royce Marine told DN. “We unfortunately can’t say any more about what this cooepration includes.”

Langballe of Akastor also claimed to DN that the company has “zero tolerance” for corruption, and that it was “important” to investigate the nature of money transfers made to the charged Petrobras executive’s account in Monaco. In the Sevan case, another Brazilian agent, Raul Schmidt, has hired Norwegian attorneys to pursue payment of commissions he claims he’s owed, while Norwegian investment fund Skagen is suing Petrobras itself and demanding NOK 1.5 billion in compensation after Petrobras’ share price sank in the wake of the corruption allegations that involve charges against people. Skagen’s investors claim that Petrobras management didn’t only ignore corruptions alarms within the company but also took part in actively receiving bribes themselves. DN reported that repeated attempts to obtain comments or defense from Petrobras went unanswered. Berglund



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