AN Aberdeen-based energy services giant Wood Group has earmarked $196m (£141.3m) to settle bribery cases - as it emerged a subsidary is paying back £6.4m contracts in central Asia.

The Crown Office in Scotland has confirmed that a Wood Group subsidiary WGPSN self-reported involvement in bribery to secure contracts in Kazakhstan.

The Civil Recovery Unit is to recover the money under proceeds of crime legislation after the company accepted it had benefitted from unlawful conduct.

Energy company WGPSN admitted that one of its subsidiaries, PSNA Limited, had benefitted from payments made to Monaco-based Unaoil to secure contracts in Kazakhstan.

The Wood Group, built by Sir Ian Wood in 1982 before he retired in 2012, had expected, as of December 2019, a figure of $46m to settle bribery matters involving authorities in the US, Brazil and the UK, but has now revealed it expects to pay more than four-times that amount.

The company has been under investigation by the Serious Fraud Office (SFO) over the link between Amec Foster Wheeler, which Wood acquired in 2017, and Unaoil, which has been the subject of a probe since 2016.

Wood is also continuing to cooperate with the US Department of Justice and Securities and Exchange Commission in relation to Amec Foster Wheeler’s link to Unaoil and other counterparties, in various regions.

The Crown Office has said that payments to Unaoil were made in connection with three contract tenders, two of which were successful, to provide services for the operation and maintenance of onshore and offshore oil and gas, chemical and petrochemical facilities in Kazakhstan.

The contracts were entered into before the PSNA business was acquired by Wood, and the potential misconduct came to light in March 2016.

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Wood conducted an internal investigation and, in May 2017, the results of the investigation were submitted to the Crown Office and Procurator Fiscal Service (COPFS).

Lord Advocate James Wolffe QC said: “Bribery and corruption undermine legitimate business and harm economic development.

“Companies are responsible for ensuring they do not allow their employees or contractors to secure any commercial advantage through bribery.

“COPFS and the Civil Recovery Unit are committed to taking effective steps to ensure businesses face up to their responsibilities and relinquish any unlawfully obtained profits.

“Any companies who uncover any instances of bribery should notify the Crown Office as soon as possible.”

WGPSN submitted a formal report under the self-reporting initiative in September 2019.

After consideration, COPFS referred the case to the Civil Recovery Unit for investigation.

The Crown Office said that Wood and WGPSN fully co-operated with the Civil Recovery Unit’s investigation and that they have taken steps to develop and improve policies and training to try to prevent similar events taking place in the future.

WGPSN has now agreed to pay £6,465,564, which represents the dividends and retained profits from the two contracts.

Anne-Louise House, Head of the Civil Recovery Unit, said: “The self-reporting initiative allows for responsible companies to accept their involvement in corrupt practices and to draw a line under previous conduct.

“In appropriate circumstances such as this, it gives them the opportunity to repay the illegitimate profits in lieu of criminal proceedings.

“The funds which have been recovered will be remitted to the Scottish Consolidated Fund.”

Wood expects phasing of the payments over all the bribery cases it is involved with, with $70m (£50.5m) payable in 2021, and the remainder following in instalments over 2022, 2023 and 2024.

“Looking ahead, we are pleased to be nearing resolution of the legacy investigations so that we will be able to draw a line under them,” said chief executive Robin Watson (below).

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Wood has reported losses for the year to December 31 of £228m, compared to a profit of £73m a year earlier, after the collapse in oil prices amid the coronavirus pandemic.

In October, a former executive at Unaoil was on was sentenced in London to three years and four months in jail for paying multi-million dollar bribes to clinch $1.7bn  (£1.2bn) worth of oil projects in post-occupation Iraq.

Basil Al Jarah, Unaoil’s 71-year-old former country manager for Iraq, admitted to paying $17m (£12.25m) in bribes to secure contracts such as oil pipelines and offshore mooring buoys in the Persian Gulf, as the war-torn country tried to shore up a battered economy after the fall of Saddam Hussein in 2003.

It was the third sentence handed down by a London judge after a five-year investigation by the Serious Fraud Office (SFO) and US authorities into how the prominent Ahsani family, which ran Unaoil, secured energy contracts for Western blue-chip clients in the Middle East, Africa and Central Asia.

Former Unaoil managers Stephen Whiteley, 55, and 45-year-old Ziad Akle have already been sentenced to three and five years in jail respectively after a London trial.

The SFO investigation originally centred on the Ahsanis, but failed extradition attempts culminating in a clash in Italy with US prosecutors over the extradition of Saman Ahsani in 2018 thwarted the agency’s attempts to prosecute them in Britain.

Wood said it had reached a "civil settlement" with the Civil Recovery Unit "in relation to the historical engagement of Unaoil by a legacy joint venture and potential unlawful conduct".

It said that a joint venture in the legacy PSN business, which was acquired by Wood in 2011, paid Unaoil a total of 1,358 million Kazakhstan Tenge (around £6.3m) in fees. Payments were on a commission basis and continued until 2015 although Wood said there was limited evidence of what services Unaoil provided for these fees.

Mr Watson said of the Uanoid case: “The investigation shone a light on behaviour that was quite simply unacceptable. While we didn’t own the business until 2011, we take responsibility for dealing with the consequences and have taken steps to further strengthen our culture and processes to ensure it does not happen again. We continue to insist on the highest standards of integrity in every country and community in which we operate.”

Roy Franklin, Wood chairman added: “Having self-reported on the issue, we conducted a thorough investigation into the matter. I am confident that the historic engagement in one part of the PSN business does not reflect the values of Wood, past or present, or our people. The settlement underlines why we attach such importance to upholding the highest standards of ethics and compliance, and we continue to strengthen our governance in this area.”