A raft of government bribery investigations launched into US oilfield companies is likely to spur reform in the industry, but will also preoccupy top executives and slow business in regions such as West Africa.
The US Department of Justice is probing possible violations of the US Foreign Corrupt Practices Act anti-bribery law at large companies including Schlumberger Ltd, Halliburton Co and Transocean Inc, according to filings with the US Securities and Exchange Commission.
All of those firms have said they are co-operating with the government. "A lot of global companies have had to stop and think, 'maybe it's going to be harder' to do business in countries like Nigeria where corruption has been rampant," Marjorie Doyle, a practice leader with consultancy LRN who is a former compliance officer hired by Vetco International Ltd.
High oil prices have triggered a rush to secure access to fields in countries where bribery of officials is often considered as a cost of doing business. Last year, three wholly owned Vetco units pleaded guilty to violating the anti-bribery provisions and agreed to pay a record $26 million criminal fine.
General Electric Co bought Vetco Gray, a unit of Vetco International Ltd, for $1.9 billion in January. Under the Foreign Corrupt Practics Act, or FCPA, it is illegal for US companies or their agents to use bribery to win business in foreign countries.
Executives at companies under investigation will be called on to make costly decisions. For example, Doyle said the chief executive officer of Vetco stopped shipments to one country because of the difficulty in finding customs brokers who complied with anti-bribery laws. Deliveries took six months.