PETR3 Petroleo Brasileiro S.A. Petrobras

By Samuel Rubenfeld 

Offshore oil rig operator Vantage Drilling International agreed to disgorge $5 million in a settlement with U.S. regulators related to a corruption probe in Brazil involving Petrobras.

Vantage Drilling, based in the Cayman Islands, settled with the U.S. Securities and Exchange Commission over accounting-control deficiencies at its predecessor company that violated the Foreign Corrupt Practices Act. The company neither admitted nor denied the SEC's findings, and it said the Justice Department closed a related investigation in 2017 without filing charges.

"We are very pleased with the closure of the U.S. government's investigation into possible violations of the FCPA," Ihab Toma, the company's chief executive, said in a statement. "Vantage has been, and remains, firmly committed to conducting its operations in compliance with all applicable laws and regulations, including the FCPA."

The case arose from allegations of improper payments made in 2009 and 2010 by a former Vantage Drilling Co. director to former officials at Brazilian state-run oil firm Petróleo Brasileiro SA, or Petrobras, relating to the contracting of a drillship. Petrobras canceled the contract on Aug. 31, 2015, according to the SEC. The companies are in a continuing dispute over a $622 million arbitration award granted to Vantage, which was related to the cancellation.

Vantage emerged from bankruptcy in 2016 as a private company; the cancellation of the Petrobras contract played a role in its bankruptcy filing. It first disclosed its role in the Petrobras probe to U.S. authorities in 2015.

The company failed to devise a system of internal accounting controls regarding its former director, and failed to implement internal controls relating to its use of third-party marketing agents, the SEC said. "These violations occurred against a backdrop where [Vantage] had an ineffective anticorruption compliance program," the SEC said in an administrative finding.

Petrobras in September agreed to pay $853.2 million to U.S. and Brazilian authorities to resolve yearslong investigations into one of the biggest corruption schemes ever uncovered. The corruption scandal at Petrobras erupted in 2014 and has loomed over that country ever since, leading to prison sentences for several executives and a former president.

The SEC credited Vantage with providing cooperation over the course of its investigation, and the company, among other things, reconstituted its board of directors, named a completely new management team and revamped its compliance program.

Write to Samuel Rubenfeld at samuel.rubenfeld@wsj.com

(END) Dow Jones Newswires

November 20, 2018 14:09 ET (19:09 GMT)

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