The global oil industry has been turned upside down by the publication of the Unaoil Papers. Vrij Nederland took an exclusive look at the emails and discovered SBM Offshore is involved in yet another huge oil corruption affair.

While the world is focussed on the Panama Papers, another huge leak happened this week as well. The global oil industry has been turned upside down by the publication of the Unaoil Papers. Investigative journalists from Australian newspapers, ‘The Age‘ and the ‘Sydney Morning Herald’, part of Fairfax Media in partnership with ‘The Huffington Post’ spent months researching on tens of thousands of leaked emails and other documents.

The company Unaoil, based in Monaco but registered in the British Virgin Islands and dubbed by journalists ‘The Bribe Factory’, proves to be the hub of a vast corruption network. Unaoil is owned by the Ahsani family, originally from Iran. Founded by father Ata, his sons Oxford-educated Cyrus and Saman are now in charge of the day-to-day management. It was the standard procedure of Unaoil to win contracts for large multinational oil companies by paying bribes. Unaoil worked as an agent for major US companies like Halliburton, Honeywell, KBR and FMC Technologies. But also with the Korean companies Samsung and Hyundai, the British Rolls-Royce; and MAN from Germany, among others.

Following the publications, police in Monaco, assisted by officers from the UK’s Serious Fraud Office, raided Unaoil’s head office in Monaco as well as private residences belonging to the management. The company’s leadership denies any involvement in corrupt practices.

The story also has a major Dutch link. The discredited AEX 25 member and Dutch multinational SBM Offshore, whose main office was for decades in Monaco and which remains its single biggest office by headcount, worked closely with Unaoil in Iraq. Unaoil was SBM’s agent, and was asked to help secure contracts on the Iraq Crude Oil Expansion Project, to connect oil fields in the south of the country via pipelines with offshore terminals where large tankers could moor.

Yet another country: Iraq

In recent years, SBM Offshore has seen its reputation severely tarnished because of corruption allegations. In 2014, it submitted to a record breaking $240 million settlement with the Dutch prosecutor (OM). But, despite claims by SBM managers at the time at the time, that settlement was nowhere near the end of it: in Brazil, investigations are still ongoing and criminal charges have been laid. And the United States Department of Justice recently reopened their investigations in SBM which it said it had closed at the time of the OM deal.

Now for the first time, and thanks to the Unaoil Papers, we have an insight into the activities of SBM Offshore in yet another country: Iraq.

‘Vrij Nederland’ last February published the story of whistleblower Jonathan Taylor, a former in-house lawyer at SBM, and part of the internal investigation which revealed that bribery had been standard practice at the very top of SBM for decades, and that the company had deliberately suppressed information thereby misleading both the markets and the authorities. Until now, the investigations have focused on the activities of SBM in Angola, Equatorial Guinea and Brazil. But for the first time, and thanks to the Unaoil Papers, we now have an insight into the activities of SBM Offshore in yet another country: Iraq.

Vrij Nederland has received the Unaoil emails that relate to the activities of SBM Offshore in Iraq. The documents date from the years 2007 to 2012. After 2003, the oil industry in Iraq, starved of investment after years of war and economic boycott had to be rebuilt almost from scratch. There was plenty of work to be had. Unaoil’s man in Iraq, Basil al-Jarah, knew everyone and everything in the oil industry. Western companies paid Unaoil high ‘service-fees’ and with that al-Jarah knew the right time and the right people to buy, according to reconstructions by Fairfax Media and The Huffington Post. Al-Jarah tried to disguise what he did to the outside world. He organized meetings in hotels and used code words in his email-messages, but they were easily identifiable to senior figures within Iraq’s Oil Ministry.

Free advice

In April 2007 SBM Offshore appears for the first time in an email from Basil al-Jarah. He describes a conversation with a certain Kifah Numan, a senior official in the Southern Oil Company (the Iraqi state oil company for the south of the country). He discussed with them the supply of so-called Single Point Mooring’s (SPMs). These are platforms at sea where tankers can moor to load oil or gas. SBM Offshore manufactures and sells these SPMs. They talked about ‘four or five’ platforms as part of a new export facility to be built on the Iraqi coast.

Al-Jarah wrote in April 2007: ‘To date I am giving advice to the Southern Oil Company free of charge to get us through the door. But we must find a way to charge for this service as consultants.’ He argues that Unaoil has little experience with this type of platforms and thus cannot rely on past experience. He then asks for a letter from SBM to have some credit with the potential client. And he wants to arrange a meeting in Dubai ‘…and try to educate the new department to be sympathetic towards SBM.’

Apparently, things work out just fine. In November 2009, Basil al-Jarah writes extensively to his bosses in Monaco after meeting a man to whom he assigns the code name ‘Lighthouse’. In reality, this was Dhia Jaffar al-Mousawi, at that time director general at the Southern Oil Company and currently (2016) deputy minister of petroleum affairs. Over the years, he received millions of dollars in kickbacks, according to Fairfax Media and Huffington Post. It is Dhia Jaffar al-Mousawi who, according to al-Jarah, said SBM Offshore would get the SPM-contract. ‘It looks like the SPM job is heading to SBM.’

Codename: Ivan

The facts are corroborated by an internal email between SBM’s then Chief Operating Officer (COO) Francis Blanchelande and Managing Director of SBM Services Geoffrey O’Nion that ‘Vrij Nederland’ has seen. In the mail, Blanchelande ask if O’Nion wants to talk with people from the Iraqi Southern Oil Company in the presence of someone from Unaoil. O’Nion replied that ‘Unaoil have to do their work in country to expedite this approval.’

On 9 February, 2010 there is an email exchange between two employees of Unaoil, Zaki Tackle and Steve Whiteley. The latter, which is both relevant and rather revealing, had previously worked for SBM Offshore. Tackle writes about the upcoming deal they hope to close for SBM and what it will bring. It is expressly stated that a certain ‘Ivan’ must ‘push’ the ‘European chains’ with the Iraqi Oil company. ‘Ivan’, it turns out, is a codename for Oday al-Quraishi, project director of the Southern Oil Company. According to Fairfax and the Huffington Post, al-Qurashi received six thousand dollars a month from Unaoil, ‘$5K for him, and $1k he needs for presents to people within.’

I found the right person to hit him hard on the head so he will sit up and listen.

At this point, the prospective deal is challenged within the Iraqi oil ministry, according to Basil al-Jarah in successive mails late February 2010. The then under-minister at the ministry of oil Ahmed Shamaa is suspicious. He wants to know why another Dutch company, Bluewater has been written off, even though they use new and modern technologies. He complains – according Unaoil representative Basil al-Jarah – about the massive corruption in his ministry. ‘Shamaa is asking: is there anyone in the Ministry trust to put as director General of the Southern Oil Company? Whoever we choose is corrupted”. Basil al-Jarah wanted him out of the way. ‘We are now in battle with this guy,’ he writes. And: ‘I feel we have defenses in place to block the damage from this man.’

Dealing with SBM’s direct competitor and fellow Dutch corporate Bluewater, Basil al-Jarah and ‘Ivan’, project director of the Southern Oil Company, discuss how to serve SBM’s interest best, and how to keep Bluewater out of the negotiations. Al-Quraishi gives al-Jarah confidential information he should never have given. He mentions officials who suggested the minister work with Bluewater. One of them is ‘now bitter and may become dangerous’. But: ‘I found the right person to hit him hard on the head so he will sit up and listen.’

Al-Qurashi also writes he ‘will go to B (=Baghdad) after the elections with the right kind of friends and it will be settled for good’. And: ‘I will play another game behind the curtains next week so we could keep up the pressure.’

On 26 April, 2011 finally the green light is given. The prediction of Basil al-Jahar that minister Shamaa ‘would run up against the wall’ was right. The contract for the first three platforms was given to SBM. Later four more SPM’s were awarded to SBM. To whom and how much is paid in kickbacks remains unclear.

This case seems to have been completed.

An exceptionally awkward moment

The question is what SBM Offshore knew or should have known of Unaoil’s way of doing business. Internal mail exchanges from SBM which Vrij Nederland has access to, and external events show the company must have known as early as 2012 that something was wrong. On 13 February, 2012, Australian media reported that Australian construction company Leighton Offshore, which was heavily involved in the construction of the Iraq Crude Oil Expansion Project, had gone to the authorities. The company’s board of directors suspected that bribes had been paid to win orders and wanted to make a clean brake. Like SBM, Leighton used Unaoil as its agent in Iraq.

The news from Australia came at an exceptionally awkward moment for SBM. Two weeks earlier one of its clients US company Noble Energy had told SBM that they had found evidence of bribery on a computer of a former SBM employee turned agent. Internally an investigation was launched. The Iraq story came on top of all this.

I do not want to put Unaoil on notice of any restriction whilst we need their full cooperation.

In a press statement, a spokesman for SBM Offshore confirmed the company has had contracts with Unaoil in Iraq. But a compliance review was completed and no irregularities were found. Big question is what the compliance review consisted off. Nothing much, if you read the internal discussion in 2012. On 14 February 2012, legal counsel Zoe Taylor-Jones wrote that to her ‘understanding, an individual in Unaoil and an individual in the Iraqi Southern Oil Company have a friendship relation.’ She also reports that Steve Whiteley –mentioned above – who had previously worked at SBM, is now employed by Unaoil. The legal officer tried to cover herself: she did not know SBM collaborated with Unaoil in Iraq. ‘I did not know about this project, I only knew that we were doing some work in Iraq.’ In other words, the legal department hardly knew what was happening. Managing Director of SBM Services, Geoffrey O’Nion warns Taylor-Jones to be prudent. ‘I do not want to put Unaoil on notice of any restriction whilst we need their full cooperation.’

On 8 March 2012, an SBM delegation visits Unaoil director Cyrus Ahsani. The conversation comes to nothing. ‘I questioned them thoroughly on the matter and the Leighton Offshore case and they replied no and throughout the meeting were very clear that they were pleased that we should have this type of meeting on such subject.’ Taylor-Jones also states that Unaoil had been audited ‘extensively’ by major firms such as Rolls Royce, KBR and Weatherford, all companies that are now mentioned by the Fairfax Media and the Huffington Post as the ones who also paid bribes.

According to SBM internal documents, SBM paid Unaoil $4,617,282 between 2005 and 2011. In April 2012 SBM clearly established that Unaoil’s fees had been high during the internal investigation into possible bribery by SBM set up following the Noble Energy call.

The Dutch Public Prosecutor (OM) focused during its investigation into corruption at SBM in 2014 on Brazil, Equatorial Guinea and Angola. They considered those countries sufficiently “representative”, whatever that meant. The Australian and British police, the US Department of Justice and the FBI are now working together in their investigation of the UnaoilPapers.

Is it not time, following the prosecution of SBM officials in Brazil in December, the reopening of the SBM case by the US justice department in February and now the Unaoil revelations, that the Dutch Public Prosecutor (OM) finally joins them and reopens its investigation into SBM Offshore?

Tomorrow, April 6th, SBM Offshore has its annual shareholders meeting in Amsterdam. 

Reaction SBM Offshore: SBM Offshore does not provide to the press details of its business contracts, or individuals involved. SBM Offshore confirms that it currently has no business partnership with Unaoil. The due diligence process encompassed various stages and interactions with Unaoil. No irregularities were found. SBM Offshore reiterates that it is committed to complying with all applicable laws and regulations.