By Nicole Hong
Schlumberger Ltd., the world's largest oil-field services
company, has agreed to pay $232.7 million for violating U.S.
sanctions in Iran and Sudan, part of the government's extended
crackdown on companies doing business with countries the U.S. has
declared off limits.
The U.S. Justice Department is expected to announce the plea
agreement Wednesday afternoon, according to a person familiar with
the situation. As part of the agreement, Schlumberger is expected
to pay a $155.1 million criminal fine--the biggest criminal fine
ever imposed for a U.S. sanctions violation--and forfeit $77.6
million in illegally obtained profits, according to the person.
Schlumberger Oilfield Holdings Ltd., a Schlumberger subsidiary,
is expected to plead guilty to conspiring to violate the
International Emergency Economic Powers Act, or IEEPA, which allows
the government to block transactions with countries under
sanctions.
The agreement caps a six-year investigation by the Justice
Department and the U.S. Commerce Department. Details of the deal
between government lawyers and Schlumberger were completed on
Wednesday, according to the person familiar with the situation.
A spokesperson for Schlumberger couldn't be immediately reached
for comment on Wednesday.
The penalty comes at a tough time for Schlumberger. The
company's share price has dropped almost 20% in the past six months
as a global oil glut has pushed crude prices to multiyear lows and
reduced demand for Schlumberger's services, which include drilling
and fracking oil and gas wells. In January, Schlumberger announced
9,000 job cuts after the firm's profit in the last three months of
2014 fell 82% from the previous year.
Schlumberger has one of its headquarters in Houston and does
business in more than 85 countries.
Multinational companies and banks have become an increasingly
frequent target for U.S. authorities, who have ramped up financial
penalties for sanctions violations. Two weeks ago, Commerzbank AG
agreed to pay $342 million for moving dollars through the U.S. on
behalf of clients in countries such as Iran and Sudan. In recent
years, other banks that have paid sanctions-related fines include
HSBC PLC, Barclays PLC and Standard Chartered PLC.
The criminal fine against Schlumberger is the biggest so far
under the IEEPA, according to the Justice Department.
Other companies have paid much costlier settlements, but their
size reflected large forfeitures of illegal profits. BNP Paribas SA
forfeited a record $8.8 billion in profits last June. The French
bank's criminal fine, however, was $140 million.
Write to Nicole Hong at nicole.hong@wsj.com
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