The Tui oil field was one of NZ’s most lucrative oil and gas discoveries but has turned into a headache for the Government.
Government officials say they awarded British consulting firm Petrofac two contracts worth hundreds of thousands of dollars without being aware the company was being investigated for bribery in the UK.
The Ministry of Business, Innovation and Employment (MBIE) awarded Petrofac a $140,000 contract in October 2017 to assess the integrity of New Zealand’s inactive onshore oil wells.
It awarded Petrofac a separate $200,000 contract in May this year to provide the ministry with urgent advice on the decommissioning of the Tui oil field.
The Government was forced to take over the Tui oil field that month after the Malaysian-owned company that had agreed to decommission it, Tamarind Taranaki, collapsed into receivership late last year.
Petrofac spokeswoman Sophie Reid said it was matter of public record that Petrofac had been subject to an investigation by Britain’s Serious Fraud Office in the UK since May 2017.
The UK SFO stated that in February 2019, a former head of sales for Petrofac, David Lufkin, pleaded guilty to 11 charges of bribery.
Those convictions related to corrupt offers Lufkin had made to influence the award of contracts worth more than US$4.2 billion in Saudi Arabia and Iraq to Petrofac, it said.
Reid said no charges had been brought against Petrofac itself or any of its current employees.
Commenting on the ongoing British investigation, she said Petrofac “continued to engage with the SFO with a focus on bringing this matter to closure as quickly as possible”.
An MBIE spokesman said the ministry learnt of the conviction of Lufkin and the ongoing UK SFO investigation into Petrofac this month.
The Tui contract was handled by Petrofac’s Perth office, he said.
“MBIE always endeavours to undertake due diligence appropriate to the scale and risk of the contract.
“In this instance, due diligence of global operations was not considered necessary.”
MBIE’s spokesman said Petrofac had expertise in the Tui field, having been awarded a commercial contract to manage a well project there in 2018.
Petrofac’s contract-win in May promoted concerned calls from local firms for assurances that they would get the opportunity to bid for future work decommissioning Taranaki’s offshore installations.
The ministry’s current contract with Petrofac was drawing to a close, MBIE’s spokesman said.
”Should Petrofac be considered for any future work, MBIE will formally address the conviction of the former employee and the ongoing investigation during the procurement process,” he said.
MBIE had not commenced any legal action against any Tamarind company or any of Tamarind Taranaki’s directors over their failure to see through the decommissioning of the Tui field, he said.
“MBIE is still considering its options in regards to any other legal action in relation to the Tui decommissioning,” he said.