UPDATE 2-Pride says probing improper LatAm payments http://today.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?view=CN&storyID=2006-06-30T161800Z_01_N30407559_RTRIDST_0_ENERGY-PRIDE-UPDATE-2.XML&rpc=66
Fri Jun 30, 2006
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HOUSTON, June 30 (Reuters) - Oil driller Pride International Inc. (PDE.N: Quote, Profile, Research) on Friday said it appeared to have made improper payments to government officials in Venezuela and Mexico that could violate U.S. federal laws.
Pride said the payments, which were discovered during an internal investigation, were made between early 2003 through 2005 to government officials and totaled less than $1 million.
"Our management and the Audit Committee of our Board of Directors believe it likely that members of our senior operations management either were aware, or should have been aware, that improper payments to foreign government officials were made or proposed to be made," the company said in its annual 10-K report to the U.S. Securities and Exchange Commission.
The Houston-based company delayed that report by several months after it said earlier this year it suspected improper payments had been made. The evidence to date from the investigation suggested company officials funneled money through vendors to government officials in order to extend contracts for two jackup drilling rigs and one semisubmersible rig operating offshore Venezuela.
Payments were also made to government officials in order for Pride to collect receivables for work completed under offshore drilling contracts in Venezuela.
The payments in Mexico were made to officials in connection with the clearing of a jackup rig and equipment through customs, the company said. Last month, Pride said its chief operating officer, John R. Blocker Jr., had retired, but would remain an employee pending the completion of the investigation.
Pride reported revenues of $173 million in Venezuela in 2005, or about 8.5 percent of its total consolidated revenues.
The company said the probe will continue while it waits to see what action various U.S. agencies will take.
"While our investigation to date of these matters and related internal control systems and processes has been ongoing for some time, at this time there can be no assurances the investigation will not uncover other violations within our global operations, including in countries outside Latin America," the company said.
The company said it could not predict whether it would be subject to legal penalties in the United States, Mexico or Venezuela.
Pride shares were off 0.4 percent, or 13 cents, at $30.97 on the New York Stock Exchange. Those shares have gained less than one percent so far this year, compared with a 16 percent gain in the OSX oil services index <.OSX>. (Additional reporting by Ben Berkowitz in New York)
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