Energy services firm Petrofac has paid a £569,000 penalty to HM Revenue & Customs (HMRC) for breaching Russia sanctions rules, the government body announced. The company self-reported the breaches, which occurred in 2022 and 2023 while it was winding down its Russian operations.
Nature of the Breaches
HMRC’s investigation found that Petrofac supplied sanctioned industrial goods to individuals connected to Russia and made them available for use in the country. The company also violated regulations by providing technical assistance related to those goods.
First Public Naming for Compound Settlement
Petrofac is the first company to be publicly named by HMRC for accepting a compound settlement, a type of penalty that allows the firm to avoid legal proceedings by paying a sum of money. Edwige Hill, deputy director in HMRC’s Fraud Investigation Service, stated: “Non-compliance with Russia sanctions is a serious offence and together with our international partners, the UK Government has implemented the most severe package of sanctions ever imposed on a major economy. Naming those involved brings us into line with other enforcement partners whilst sending a clear message on the consequences of breaching sanctions rules.”
Petrofac's Response
A Petrofac spokeswoman commented: “The compound settlement reflected due consideration of our cooperation and the mitigating actions taken.” The company builds and manages energy infrastructure, including oil and gas production, refineries, and renewables in regions such as the Middle East and the UK North Sea. Its UK business, based in Aberdeen, operates North Sea oil platforms for firms including BP and Shell.
Recent Financial Struggles
Petrofac filed for administration in October last year after the collapse of a renewables contract in the Netherlands. Its asset solutions business was bought by CB&I in April, saving thousands of jobs, and it recently sold its Emirates engineering and construction business.
