Prosecuting Agency:
U.S. Securities and Exchange Commission
Type of Action:
SEC Administrative Proceeding
Docket or Case Number:
3-12280
Name of Prosecuting Attorneys:
Unknown
US Assisting Agencies: Unknown
Foreign Enforcement Action/Investigation: Unknown
Foreign Assisting Agencies: Unknown
Origin of the Proceeding:
Voluntary disclosure
Whistleblower:
Unknown
Case Status:
Resolved
Summary
Oil States International, Inc. ("Oil States") is a specialty provider to oil and gas drilling and production companies in the United States and in many of the world's active oil and gas producing regions, including South America.
Between December 2003 and November 2004, employees of Oil States' wholly owned subsidiary, Hydraulic Well Control, LLC (“HWC”), provided approximately $348,350 in improper payments to employees of Petróleos de Venezuela, S.A. (“PDVSA”), an energy company owned by the government of Venezuela. The employees were asked to participate in the kickback scheme by a consultant for HWC, after he was requested to do so by the PDVSA employees. The scheme required the consultant to submit inflated bills to HWC for his services and kickback the excess to the PDVSA employees. At the same time, HWC improperly billed PDVSA for “lost rig time” on jobs or “gel” (a mineral-based material that is used in drilling to control viscosity and to protect formations from drilling fluids) that had not actually been used on PDVSA jobs. If HWC did not comply with the proposed scheme, the PDVSA employees were capable of stopping or delaying HWC’s work.
On April 27, 2006, the SEC filed a settled administrative cease and desist proceeding, charging Oil States with violations of the books and records and internal control provisions of the FCPA. Under the terms of the cease and desist order, Oil States agreed to cease and desist from committing or causing any violations or future violations of the books and records and internal control provisions of the FCPA. In determining to accept the settlement, the Commission considered remedial acts promptly undertaken by Oil States and cooperation afforded the Commission staff.
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