Oilfiled services giant Schlumberger has entered plead guilty for violating sanctions in Iran and Sudan, according to the Department of Justice.
Pending court approval, the company will pay $US232.7 million “for conspiring to violate the International Emergency Economic Powers Act (IEEPA),” according to the Department of Justice.
The act gives the President the power to regulate business activity with sanctioned countries who threaten the US economy or national security.
According to court documents, a Schlumberger business unit disguised and approved capital expenditure requests from both countries, transferred drilling equipment, and provided technical support — all of which violate the act. The unit was called ‘Drilling & Measurements’ (D&M) and earned around $US77.5 million from its operations in both countries between February 2004 and June 2010.
“Even if you don’t directly ship goods from the United States to sanctioned countries, you violate our laws when you facilitate trade with those countries from a U.S.-based office building,” Columbia district attorney Ronald Machen said in a statement.
The court documents had some detail on how Schlumberger pulled this off. In some cases, it used automated systems for the capex requests, but D&M staff in the Middle East occasionally sent additional emails to US-based staff. They used code names, calling Iran the “Northern Gulf,” and Sudan “Southern (or South) Egypt.”
Schlumberger abandoned its oilfield services operations Sudan in 2011 and left Iran in 2009. The terms of the plea agreement require the company to stay out of both countries completely, and continuously prove that it is not in violation of sanctions.
In the fourth quarter, Schlumberger also took a $US472 million devaluation charge related to the decline of the Venezuelan bolivar against the US dollar.
It laid off 9,000 people, or 8% of its workforce in January, as part of the fallout from the oil crash.
Schlumberger shares rose 1.7% on Wednesday and were little changed after hours.