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SBM Offshore Update on Legacy Issue in Brazil

Source: www.gulfoilandgas.com 12/22/2017, Location: South America

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Further to the Update issued on November 6, 2017 the Company reports on two developments in Brazil. The Company learned that following a review of the leniency agreement pending the injunction order suspending signing of the leniency agreement, the Federal Court of Accounts (Tribunal de Contas da Uniao – “TCU”) decided to allow the Ministry of Transparency, Oversight and Control (Ministerio da Transparencia, Fiscalizacao e Controle – “MTFC”), the General Counsel for the Republic (Advocacia Geral da Uniao – “AGU”) and Petrobras to move forward with the signing of the leniency agreement.

The Federal Prosecutor’s Office (Ministerio Publico Federal –MPF”) has filed a damage claim based on the Brazilian Improbity Act with the Federal Court in Rio de Janeiro against a Brazilian subsidiary of the Company, an intermediate holding company in Switzerland and a number of individuals, including former employees of the SBM Offshore Group. The claim relates to the alleged improper sales practices before 2012 that are also the subject of the leniency agreements under discussion with the Brazilian authorities and Petrobras. The judge handling the case will now have to decide on the acceptance of the lawsuit before the Brazilian court, after which the defendants could be served with the court documents. In the context of this lawsuit, the MPF asked the court to impose a provisional measure as a means to secure damages potentially awarded.

The Company is analyzing the legality of the MPF damage claim and the potential impact of these developments on the ongoing discussions at large and is actively seeking the views from the authorities involved. If and when necessary, the relevant Group companies will defend their position before the authorities and in court.

The Company again reaffirms its commitment to close out its legacy issues in Brazil by means of a leniency agreement. However, to enter into the leniency agreements, the Company would need to be in a position to reach satisfactorily closure with all Brazilian authorities and Petrobras on all outstanding leniency issues at the same time. Under the current circumstances, the Company cannot guarantee that a satisfactory resolution will be reached.

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