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SBM Offshore reserves $240 million for potential ‘sales practices’ settlement

Netherlands-based SBM Offshore included a $240 million provision in its financial statement for the first half of the year in anticipation of a potential settlement for improper sales practices.

SBM provides floating production systems for the oil and gas industry and related services.

In 2012, an SBM internal review flagged improper sales practices involving some of company's sales agents.

The company brought in outside counsel and forensic accountants to investigate and disclosed its investigation to Dutch authorities and the U.S. Department of Justice, Petro Global News reported Thursday.

SBM found that agents in Angola and Equatorial Guinea had made payments to third parties who then disbursed the money to government officials.

The company published a statement about investigations on its website this week.

The investigation also found sales agents gave third parties other items of value although SBM didn't specify what these items were.

The company said the payments began in early 2012.

SBM's investigation determined that the company paid $18.8 million in commissions to Equatorial Guinea and $22.7 million in commissions to Angola between 2007 and 2011.

SBM is discussing potential settlement options, the company said.

While SBM doesn't know what the settlement's final price tag will be the provision reflects the information currently available to it.

SMB said it can't provide further details about the resolution of the compliance issues and can't assure that a settlement will even be reached.

The company said it will keep the market up to date on new developments.


Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.