A category in our post Where The Money Is listed big-dollar FCPA enforcement actions in the pipeline. One was French company Technip, which had just disclosed a €245 million ($330 million) provision for its role in the TSKJ Nigeria joint venture. That's the same case KBR and Halliburton settled last year for $579 million.
We weren't the only ones reading Technip's news. So was Italian energy giant ENI SpA. It was also part of the TSKJ joint venture through a subsidiary it later sold.
ENI's 2009 Annual Report (released March 11, 2010) said:
In a press release of February 12, 2010, the French company Technip announced, as a result of the circumstances that its discussions with U.S. authorities have intensified over the last weeks, the recognition of a provision for an amount of €245 million reflecting the estimated cost of resolution with such Authorities. The decision was made according to the status of ongoing discussions with DOJ and SEC that allowed Technip to estimate a global resolution of all potential claims against the company arising from the investigation.
As to ENIi, the contacts with the U.S. authorities have been intensified recently. Based on the ongoing status of the discussions, the Company has been able to estimate the cost of a global resolution of all potential claims arising from the investigation with the U.S. authorities, similarly to Technip. As a result of this, a provision of €250,000,000 has been accrued, also considering the contractual obligations assumed by ENI to indemnify Saipem as part of the divestment of Snamprogetti.
Discussions with the U.S. authorities are underway.
If Technip and ENI resolve their FCPA cases for around $300 million each, that means TSKJ's $180 million bribery in Nigeria will have resulted in U.S. financial penalties of more than $1.1 billion. Some in Nigeria will no doubt ask why the penalty money should end up in the U.S. Treasury and not their country.
ENI's ADRs trade on the New York Stock Exchange under the symbol E.
Download a copy of ENI's 2009 Annual Report released March 11, 2010 here.
Our thanks to a friend for sending the link to ENI's disclosure.