With CRI Group set to be an exhibitor at next week's Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC 2016), it is the perfect time to take a look at some of the recent fraud scandals that have rocked the oil and gas industry.
The industry itself is in the midst of a transformative period, leaving companies at risk from fraud and unethical business practices. In today’s low oil price environment, oil and gas companies are looking for ways to cut overhead expenditures while protecting their bottom line. Those factors create a scenario that can be complex and hazardous for any company that doesn't have proper anti-fraud controls in place.
It's a lesson that's already been learned by some large corporations that have faced serious scandals. Among them:
Monaco-based oil consulting company Unaoil has been embroiled in scandal ever since a media investigation exposed wide-reaching fraud allegations involving the firm. A joint investigation conducted by Australian-based Fairfax Media and the Huffington Post presented emails and other alleged evidence that Unaoil facilitated or encouraged bribes on behalf of several large international oil and gas companies.
In particular, the scandal involves several Western-based companies winning several energy contracts in the Middle East and Africa, through illegal and unethical means supported or facilitated by Unaoil. The allegations include bribery and corruption.
Currently the sixth-largest energy company in the world, Petrobras is a mainstay in Brazilian business and its global reach includes exploration, production, refining and sale of oil and gas. Three major factors help frame Petrobras in terms of the scandal: 1) It is backed by government funds; 2) It has close links with government officials and agencies; 3) Until recently, it held a monopoly over the country’s oil industry.
So, when it was revealed that the company was involved in bribes-for-contracts, skimming, illegal gifts, bid-rigging and other alleged corruption, it was, for many Brazilians, only shocking in terms of scale. The energy giant’s close ties with the government only fueled the perception of corruption and helped lead to the massive protests by Brazilians against fraud and unethical business practices.
PDVSA (Venezuela state-run oil corporation)
In March, a Venezuelan national living in Florida and four other people pleaded guilty to federal charges for a bribery scheme involving millions of dollars in contracts between U.S.-based energy firms and Venezuela's state-run oil company.
Officials responsible for procurement at the company, known by its initials PDVSA, were wined, dined and treated to swanky hotel stays and a home mortgage in Texas was even paid off, according to court documents. The case has been closely watched in Venezuela, where the opposition accuses the governing socialists of looting PDVSA and bankrupting the nation.
These are just examples of the fraud and corruption risks facing energy companies today. It is against this backdrop that CRI Group brings its expertise to ADIPEC, Nov. 7-10 at the Abu Dhabi National Exhibition Centre (ADNEC). As an exhibitor at ADIPEC (Hall No. 5, Booth No. 5170), CRI Group will convey its due diligence capabilities and share fraud prevention best practices among more than 95,000 oil and gas professionals from over 120 companies.
Held under the patronage of the President of the United Arab Emirates, His Highness Sheikh Khalifa Bin Zayed Al Nahyan, and organised by the Global Energy division of dmg events, ADIPEC is the global meeting point for oil and gas professionals. As the largest energy event in the Middle East and North Africa, ADIPEC is a knowledge-sharing platform that enables industry experts to exchange ideas and information that shape the future of the energy sector.
“For CRI Group, decreasing risk is what matters for our clients, and thus we will be on hand at ADIPEC 2016 to communicate the importance of this for oil and gas companies’ growth and sustainability,” Anjum said. “For our first appearance at ADIPEC, we look forward to meeting with as many attendees as possible to discuss the resources and expertise available for preventing and detecting fraud.”