Schlumberger Oilfield Holdings Ltd. (SOHL) agreed to plead guilty and pay a fine of more than $232.7 million for conspiring to violate the International Emergency Economic Powers Act (IEEPA) by willfully facilitating illegal transactions and engaging in trade with Iran and Sudan, the US Department of Justice announced on Mar. 25.
It said that a plea agreement, which is contingent on federal court approval, also requires SOHL to accept corporate probation for 3 years, continue to cooperate with the US government, and not commit any additional federal felony violations.
DOJ said SOHL parent company Schlumberger Ltd. also agreed to maintain cessation of all operations in Sudan, report on its compliance with sanctions, respond to US authorities’ requests for information and materials related to that compliance, and hire an independent consultant to review its internal sanctions policies and procedures as well as its internal sanctions compliance audits.
According to court documents, Drilling & Measurements (D&M), a US-based Schlumberger business segment, provided oil field services to Schlumberger customers in Iran and Sudan through non-US subsidiaries of SOHL from early 2004 through June 2010.
Although SOHL, as a Schlumberger subsidiary, had policies and procedures designed to ensure that D&M did not violate US sanctions, SOHL failed to train its employees adequately to ensure that all US persons, including non-US citizens who resided in the US while employed at D&M, complied with Schlumberger’s sanctions policies and compliance procedures, DOJ said.
As a result, it said D&M employees residing in the US violated US sanctions against Iran and Sudan by:
• Approving and disguising the company’s capital expenditure requests from Iran and Sudan for the manufacture of new oil field drilling tools and for the spending of money for certain company purchases.
• Making and implementing business decisions specifically concerning Iran and Sudan.
• Providing certain technical services and expertise to troubleshoot mechanical failures and sustain expensive drilling tools and related equipment in Iran and Sudan.
DOJ noted that in consultation with the US Department of State, Schlumberger agreed to no longer pursue new oil field contracts in Iran in 2009. The company voluntarily decided in 2001 to stop providing oil field services in Iran and North Sudan. Schlumberger ceased providing those services in Iran as of June 30, 2013, and presently no longer provides such services in North Sudan as well, DOJ said.
Schlumberger has not responded to OGJ’s request for a comment.
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