Schlumberger, the world's largest oilfield services company, whose domestic offices are based here in Greater Houston, has agreed to pay more than $232 million for violating U.S. sanctions in Iran and Sudan. The subsidiary Schlumberger Oilfield Holdings Limited will also plead guilty to conspiring to violate the International Emergency Economic Powers Act or IEEPA. Other companies have paid larger settlements, but those were mostly forfeitures of illegally-obtained profits. That only applies to $77 million of Schlumberger's payment; according to the U.S. Justice Department, the rest — $155 million – represents the largest criminal fine ever imposed in connection with prosecution under the IEEPA.
According to court documents, between 2004 and 2010, Schlumberger's Drilling and Measurements or D&M business segment, based in Sugar Land, provided oilfield services to customers in Iran and Sudan through a non-U.S. subsidiary of Schlumberger. The Sugar Land unit apparently tried to hide what it was doing. According to court records, in communication, employees used code words, like "Northern Gulf" for Iran, and "Southern Egypt" for Sudan.
The Justice Department calls it a "landmark case that puts global corporations on notice that they must respect our trade laws when on American soil."
The fine and guilty plea come at a tough time for Schlumberger. Amid dramatic drops in the price of oil, the company announced layoffs earlier this year of up to 9,000 employees.
We discuss what this means for Schlumberger, and what it might mean for other oil services companies who seek to do more business overseas, with News 88.7 FM business reporter Andrew Schneider.