ERHC Energy Inc (ERHE)

[Nightdaytrader]

Oil drilling companies to pay record settlement
By JUAN A. LOZANO
Associated Press
HOUSTON — Three oil drilling companies — subsidiaries of a British firm — have agreed to pay a $26 million fine for bribing Nigerian officials in order to get preferential customs treatment, Justice Department officials announced Tuesday. The fine by the companies, subsidiaries of London-based Vetco International Ltd., is the largest criminal settlement of foreign corruption charges, said Deputy Attorney General Paul J. McNulty.

“This case ... confirms our commitment to root out corruption,” McNulty said. “The Department of Justice will continue its efforts to assure a level playing field for businesses operating abroad.”

During a closed hearing in a Houston federal court Tuesday, the companies — Vetco Gray UK Ltd., Vetco Gray Controls Inc., and Vetco Gray Controls Ltd. — pleaded guilty to violating the Foreign Corrupt Practices Act.

Vetco Gray Controls Inc. agreed to pay a $6 million fine; Vetco Gray Controls Ltd., $8 million; and Vetco Gray UK Ltd., $12 million.

A fourth subsidiary, Aibel Group Ltd., agreed to accept responsibility for similar conduct by its employees.


According to court documents, the four subsidiaries paid Nigerian customs officers $2.1 million from September 2002 to at least April 2005 to speed equipment and employees into the country. At least 378 corrupt payments were made to Nigerian officials, authorities said.

At the time, the companies were providing engineering and procurement services and subsea construction equipment for Nigeria’s first deepwater oil drilling project, the Bonga Project.

The payments were coordinated mainly through Vetco Gray Controls Inc.’s offices in Houston.

This was the second time that Vetco Gray UK Ltd. pleaded guilty to corruption charges.

In July 2004, Vetco Gray UK agreed to pay $5.25 million for bribing Nigerian government officials with more than $1 million for insider bid information on oil and gas construction contracts.

Justice Department officials said their investigation was resolved due in part to Vetco International voluntarily disclosing what had happened and the subsidiaries’ agreement to take steps to fix the problem.

In a statement, Vetco International Ltd. said the violations began under prior ownership in 2002 and stopped when discovered by current management in April 2005.