Petrofac fined £77m for bribery offences, shares surge

Petrofac shares surged after the oilfield services provider said it has been fined £77m by Southwark Crown Court for seven offences of failing to prevent bribery in the Middle East between 2012 and 2015, drawing a line under the issue.

Last week, the company said it had struck a deal with the Serious Fraud Office following a four-year investigation. It said it could be facing a fine of $240m (£176m).

Petrofac said on Monday that all employees involved in the charges have left the business.

The penalty comprises a confiscation order of £22.8m, a £47.2m fine and the SFO’s costs of £7m.

Chairman René Médori said: "This draws a line under a regrettable period of our history. We have taken responsibility, reformed and learned from these past mistakes, as acknowledged by the SFO and the Court.

"Most importantly, the extensive work that we have done since the SFO investigation began means that the Petrofac of today has a comprehensive compliance and governance regime that meets or exceeds international best practice. The past behaviour uncovered by the SFO would not be possible today, and we look to the future a better and more focused company, well positioned to capitalise on the opportunities we see before us."

At 1350 BST, the shares were up 8% at 188p.

Laura Hoy, equity analyst at Hargreaves Lansdown, said Petrofac had "closed the book on a tumultuous chapter".

"The monetary loss will be a relief, since far higher numbers were bandied around at the start of the investigation, and Petrofac is more than capable of covering the fine. Though it could prove unhelpful as the group aims to shore up its balance sheet and return to a net cash position.

"The bigger story is that the end of the investigation will unlock the lucrative Saudi Arabia and UAE markets. Petrofac’s been unable to compete for new contracts with the investigation underway, and that’s created a lot of uncertainty about the group’s order book. With the shackles off, future prospects should start looking rosier."