Rolls-Royce admits bribes to SOCAR

In a $170 million settlement paid to the US government for bribery cases in six countries, Rolls-Royce has admitted that it paid $7.8 million in bribes to SOCAR, the Azerbaijan state-owned oil and gas company.

The bribes were paid by the company’s American affiliate Rolls-Royce Energy Systems (RRESI) in order to ensure large orders of turbines in Azerbaijan. The US Justice Department filed the suit because an American company was involved and because it considered SOCAR to be “controlled by the Azeri government and performed government functions for Azerbaijan.”

Rolls-Royce admits that RRESI through an intermediary made over $7.8 million in corrupt payments between 2000 and 2009 “to bribe foreign officials at SOCAR”. The suit calculated that RRESI earned profits of over $50 million on turbine deals in Azerbaijan.

The United Kingdom’s Serious Fraud Office identified Unaoil as an intermediary company in fraudulent oil deals with many companies including Rolls-Royce. According to reporting by The Guardian newspaper, Rolls-Royce was using Unaoil’s help to secure contracts in Azerbaijan as early as 2001.

Rolls-Royce deals in Azerbaijan include:

  • Over $50 million in 2002 for five huge generators; three for the Sangachal onshore oil processing facility and two for Caspian Sea offshore platforms
  • Four turbines that were assembled in 2005 for offshore platforms
  • A 120 million euro service contract in 2007 to service 28 turbines both onshore and offshore
  • Five turbines ordered in 2009 for an offshore platform
  • $50 million in July 2011 for three huge energy units at the West Chirag offshore platform

Other Rolls-Royce business in Azerbaijan:

  • Improtex Motors opened a 300 square meter Rolls-Royce dealership in 2014. Improtex Motors belongs to Improtex Group. Its president was Fizuli Alakbarov until 2006, when he became Minister of Labor and handed the company over to his wife
  • Azerbaijan Airlines bought Rolls-Royce engines for 4 Boeing 707, 2 Airbus A340 and 1 Gulfstream

The American suit also listed bribes in Angola, Iraq, Kazakhstan, Brazil and Thailand. Rolls-Royce has also reached settlements with the United Kingdom’s Serious Fraud Office and Brazil’s Ministerio Publico Federal for an additional $604.8 million for bribes paid in China, India, Indonesia, Malaysia, Nigeria, Russia and Thailand.

SOCAR has not yet responded to questions.

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