*How former Petrobras exec was sentenced for Samsung drillship bribe
*NNPC GEC, an enabler
OpeOluwani Akintayo
25 September 2018, Sweetcrude, Lagos — In 2015, a Brazilian judge had sentenced Nestor Cervero, former international chief of state-run oil firm Petrobras, to just over 12 years in prison for corruption and money laundering related to a bribe allegedly paid to the speaker of Brazil’s lower house of Congress.
Cervero and two other defendants were accused of organising bribes from Korean shipbuilder Samsung Heavy Industries in exchange for two drillship contracts, the Petrobras 10000, which was leased jointly by Petrobras and Mitsui in 2006, and the Vitoria 10000, hired by Petrobras in 2007, findings by SweetcrudeReports has shown.
Consultant Julio Camargo, who said in a plea bargain testimony that the then speaker, Eduardo Cunha asked him for a $5 million bribe, was given a 14-year sentence that was reduced to reporting to police twice monthly and doing community service because he collaborated.
Lobbyist Fernando Soares, accused of funneling bribes to Cunha’s Brazilian Democratic Movement Party, PMDB, was sentenced to over 16 years in jail.
Cunha, who quitted former Brazilian President, Economist and politician Dilma Rousseff’s ruling coalition a few years back, had accused her government of framing him in the broadening scandal focused on Petroleo Brasileiro SA, or Petrobras.
He was not a defendant. But the sentences handed down by federal Judge, Sergio Moro gave federal prosecutors in Brasilia more ammunition to bring charges against Cunha and other politicians thought to have benefited from the price-fixing and political kickback scheme.
Cervero’s 12 years and three-month sentence was the second he had received from Moro.
In May 2015, he was sentenced to five years in prison for using a front company to launder money stolen from Petrobras and buy a luxury apartment in Rio de Janeiro. He was fired from Petrobras in 2014 and arrested in January as he stepped off a plane from Europe.
However, despite the degree of graft uncovered in the case, executives at Samsung Heavy Industries were not charged, neither were they investigated in the corruption and bribery case- its executives had walked away unscathed.
Fast-forward to years after in Nigeria
Bidding for the $3.1 billion Floating, Production Storage and Offloading, Egina FPSO vessel took place three to four years before the vessel sailed into Nigeria and was birthed at the LADOL yard on Snake Island, Lagos Deep Offshore Logistics Base. The Egina project has a 51 months execution timeline, and it will take anywhere between 4 and 5 years for Samsung Heavy Industries to construct a facility in Nigeria to execute the local content scope of the Egina FPSO package.
SweetcrudeReports gathered that Samsung bribed its way to land the Egina FPSO contract award, as another South Korean company which participated in the bids tender processes, Hyundai Heavy Industries, HHI emerged preferred bidder, and was subsequently recommended by the National Petroleum Investment Management Services, NAPIMS, the investment arm of the Nigerian National Petroleum Corporation, NNPC, making the circumstances in which Samsung was selected appear inexplicable.
Checks revealed that Samsung had entered into a partnership with Intels for execution of the Egina FPSO packages and that the Nigerian company had deployed its immense political clout to pressure the NNPC management into breaking its own tendering processes, and rules of engagement.
It was gathered that at a meeting which took place after a Group Executive Committee meeting, held a few days before 2013 Christmas, Mr. Andy Yakubu, the NNPC group managing director, Abiye Membere, the NNPC group executive director and Mr. Tony Madichie, the NNPC secretary and legal adviser, decided to select Samsung for the FPSO package.
The Group Executive Committee, GEC, of the NNPC at the time explained that the rationale behind the award to Samsung Heavy Industries was that the company gave a 5 percent discount on the bid advanced by HHI for the Egina FPSO package. Strangely, HHI was neither invited by the GEC nor afforded the same opportunity to match or best the SHI offer lending credence to talk of bribery.
Subverting Nigerian Content scope
The selection of SHI for the Egina FPSO award ran against the grain of due process, the Nigerian Content scope was completely muddled up, putting in jeopardy the possible gains derivable thereof, and the aspirations of the federal government.
Before the Egina FPSO award, Samsung had never executed any project in Nigeria neither did it have any presence in the country.
An NNPC staff who pleaded anonymity had told SweetcrudeReports as far back as 2013, that “Obviously, no aspect of the FPSO package will be executed in Nigeria if Samsung gets the endorsement of the NNPC Board”.
Continuing efforts to obtain a reaction from executives of Samsung have so far proved abortive.
