Energy Trader Vitol Paying $163 Million to Settle Corruption, Manipulation Charges
04 Dec 2020

Swiss-based energy firm Vitol agreed to pay $163 million to settle criminal and civil charges that its employees paid bribes to gain an advantage when bidding for oil in Brazil, Mexico and Ecuador.

Vitol’s deal with the Justice Department, announced Thursday in Brooklyn federal court, is the first in what is expected to be a series of similar settlements involving global commodity trading companies. Some of the claims grew out of a sweeping corruption scandal in Brazil that focused on bribery of officials at state-controlled Petróleo Brasileiro SA, also known as Petrobras.

A private company that is one of the largest traders of crude oil in the world, Vitol said it cooperated extensively with authorities, yielding a settlement that is more lenient. “We understand the seriousness of this matter and are pleased it has been resolved,” chief executive officer Russell Hardy said in a statement.

The deal includes a deferred-prosecution agreement with the Justice Department, allowing Vitol to escape charges if it stays out of trouble for three years. The company will pay a $90 million fine to the DOJ and an additional $45 million in a coordinated settlement with Brazilian authorities, according to U.S. prosecutors.

Vitol, accused of paying millions in bribes over a decade, also settled a probe by the Commodity Futures Trading Commission. It will pay at least $28 million to the CFTC, a civil regulatory agency.

Vitol trades 8 million barrels a day of crude oil and manages upstream assets and refineries, according to its website. Other trading companies that have faced similar corruption investigations include Glencore PLC and Singapore-based Trafigura Group Pte. Ltd.

Vitol admitted paying more than $8 million in bribes to at least nine Petrobras officials to get inside information that included weekly reports containing the oil company’s production volume and anticipated imports, as well as “last look” information that revealed confidential bids by competing companies, according to the settlements.

Traders used the information to determine the exact price they would need to bid to buy from Petrobras, a figure they sometimes called the “golden number.” They used aliases such as “Batman,” “Popeye” and “Beb.”

In Mexico and Ecuador, Vitol traders paid more than $2 million in bribes to officials at the state-owned oil Petróleos Mexicanos, known as Pemex, and Petroecuador, prosecutors said. The scheme in those countries was ongoing as recently as July 2020, they said.

Brazilian prosecutors announced in 2018 that they were probing Vitol, Glencore and Trafigura for paying bribes that won them better terms on trading contracts. The authorities said bribes were paid to executives of Petrobras’s marketing and trading department and involved employees in the state-controlled oil producer’s Houston and Rio de Janeiro offices.

By Dave Michaels and Dylan Tokar, The Wall Street Journal, 3 December 2020

Read more at The Wall Street Journal

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