SBM Offshore signs second agreement with Brazilian public prosecutor

Following an announcement on July 26, 2018 that a leniency agreement between Brazilian Authorities CGU, AGU, and Petróleo Brasileiro (Petrobras) allowing SBM Offshore to resume normal business activities with Petrobras had been signed, the company has now also signed an additional agreement with the Brazilian Federal Prosecutor’s Office (MPF).

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. The agreement is subject to approval by the Fifth Chamber of the MPF.

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.

In addition to the amounts agreed in the leniency agreement, the new agreement provides for the payment of an additional fine by SBM Offshore of  BRL200 million (approximately US$48 million). The additional fine is to be paid to Petrobras in instalments, with an upfront payment of BRL60 million, followed by seven BRL20 million instalments thereafter. This additional agreement brings the total amount of the provision established by SBM Offshore 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.