Diavaz Gas Com, Sociedad Anómina Promotora

de Inversión de Capital Variable

Mexico
Due Diligence Report for Arm Energy Management LLC

August 27, 2021

marcumllp.com
 Confidential material

Please note that this document contains proprietary and confidential information provided to Arm Energy for the
sole purpose of informing Arm Energy’s independent evaluation of the entity and/or individual(s) referenced in
this report. The information contained in this report is not intended to be, nor should be, used otherwise, nor
should it be disclosed to other parties.

Disclaimer

This internal draft document is supplied for the purposes of facilitating discussions with Arm Energy. It is
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Neither the authors nor Marcum make any representation or warranty as to the accuracy or completeness of
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The conclusions set forth herein are based on independent research and publicly available material and do not
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on this paper.

Confidential and Privileged

Marcum relies upon the definition for Politically Exposed Persons (PEPs) published by Thomson Reuters World-
Check .

Definition of Politically Exposed Persons (PEPs)1

The Thomson Reuters World-Check subscribes to the PEP definition put forth by the Financial Action Task
Force (FATF), which states, “…individuals who are or have been entrusted with prominent public functions in a
foreign country, for example Heads of State or of government, senior politicians, senior government, judicial or
military officials, senior executives of state owned corporations, important political party officials. Business
relationships with family members or close associates of PEPs involve reputational risks similar to those with
PEPs themselves. The definition is not intended to cover middle ranking or more junior individuals in the
foregoing categories.”

Regulation issued under Section 312 of the USA PATRIOT Act of 2001 defines the term “senior foreign political
figure” as a current or former senior official in the executive, legislative, administrative, military, or judicial
branches of a foreign government, whether or not they are or were elected officials; a senior official of a major
foreign political party; and a senior executive of a foreign government‐ owned commercial enterprise. Senior
executives are individuals with substantial authority over policy, operations, or the use of government ‐ owned
resources. Also included in the definition of a senior foreign political figure are immediate family members of
such individuals, and those who are widely and publicly known (or actually known) close associates of a senior
foreign political figure.

PEP affiliation is identified under the following six categories.

1. International organizations (e.g. United Nations, World Bank and the World Trade Organization)
2. Regional organizations (e.g. Members of European Parliament, the Organization of American States
and the African Union)
3. National governments (e.g. Heads of State, Members of Parliament and members of ruling royal families
and dynasties)
4. Sub-national governments (e.g. State Governors, Provincial Heads and Premiers)
5. Local governments / local PEP definitions (e.g. mayors of capitals and certain city mayors)
6. Non-government (e.g. influential religious leaders, senior political party officials and political pressure
groups)

1
Thomson Reuters World-Check

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Table of Contents

1. Company Information ................................................................................................ 3

1.1 Primary Industry Classifications............................................................................... 3
1.2 Corporate Background............................................................................................. 4
1.2.1 Affiliated Entities................................................................................................... 4
1.3 Key Personnel ........................................................................................................10

2. Potential Government & Political Affiliation ............................................................ 12

3. Derogatory Media ..................................................................................................... 12

4. Sanctions & Regulatory Issues ............................................................................... 17

5. Litigation Matters ..................................................................................................... 18

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1. Company Information2

Company Overview

Company Name Diavaz Gas Com, S.A.P.I. de C.V.

Company Type Oil/Gas Field Services

Country of Origin Mexico

Established 1973

Official Address Avenida Revolución 468

Colonia San Pedro de Los Pinos, 03800
Mexico City, Mexico

Website http://www.diavazgas.com/en/home/

Number of Employees Undetermined

DUNS Number(s)3 81-126-7590

Contact Phone +52 (55) 5062-1300

Contact Email(s) None Found

1.1 Primary Industry Classifications

SIC Number4 SIC Description

1389 Gas/Oilfield Services

2
Thomson Reuters, Capital IQ, Dun & Bradstreet
3
The Data Universal Numbering System, abbreviated as DUNS or D-U-N-S, is a proprietary system developed and regulated by Dun
& Bradstreet (D&B) that assigns a unique numeric identifier to business entities.
4
The Standard Industrial Classification (SIC) is a system for classifying industries by a four-digit code. It is used by U.S. government
agencies to classify industry areas. Thomson Reuters, Dun & Bradstreet

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1.2 Corporate Background5

Diavaz Gas Com, S.A.P.I. de C.V.

Diavaz Gas Com, S.A.P.I de C.V. (“Diavaz Gas”) is a subsidiary of Grupo Diavaz, S.A. de C.V. (“Grupo
Diavaz”). Diavaz Gas shares its headquarters with its parent company in Mexico. The DUNS number for
Diavaz Gas is 81-126-7590. Diavaz Gas has a website, http://www.diavazgas.com/en/home/, though this
website does not appear to be fully active and adequately functioning.

1.2.1 Affiliated Entities

Grupo Diavaz, S.A de C.V.6

www.diavaz.com

Groupo Diavaz is a sociedad anónima de capital variable domiciled in Mexico. It was originally founded in
1973 as a diving company providing inspection, maintenance, and repair services for offshore oil facilities.
Grupo Diavaz has since expanded to employ more than 3,700 people and encompasses five major
business segments: (i) offshore oil industry services, (ii) terrestrial oil services, (iii) gas and energy
distribution and commercialization, (iv) oil asset maintenance, and (v) oil field operations. It is
headquartered in Mexico City.

The company also provides petroleum system studies, including geo-chemical analysis, and static and
dynamic studies of deposits; integrated services for the development of petroleum and gas fields; and
compression, injection, self-supplied pneumatic pumping, and well services for petroleum and gas
industries. In addition, the company offers IMR pipelines services, infrastructure for offshore operations,
diving services, marine solid studies, and specialized services, as well as services for the construction,
maintenance, and remodeling of platforms; and services for the compression and injection of gas, self-fed
gas-lift injection units, services for wells, alternate or continuous injection of steam, development of gas
fields, optimization and development of mature fields, geosciences studies, and environmental studies.
Further, the company engages in the commercialization and distribution of natural gas for residential,
commercial, and industrial customers in Sonora; and develops and builds packaged projects for the
petroleum industry.

On its website, Grupo Diavaz has listed various National Oil Companies (“NOCs”) and other prominent
players in the oil and gas industry as strategic and commercial alliances. The extent of involvement and
exact nature of Grupo Diavaz’s relationships with these entities could not be determined from any of the

5
Thomson Reuters & https://www.diavaz.com/en/about-us/
6
Capital IQ & https://www.diavaz.com/en/about-us/

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open source and database search investigations.7 However, a brief description of each of these entities
and any negative information identified in relation to them is outlined within the following sections of this
report.

Grupo Diavaz, S.A de C.V’s Partnerships with National Oil Companies (“NOCs”)

Petróleos Mexicanos (“PEMEX”)8

www.pemex.com

PEMEXis a Mexican state-owned petroleum company managed and operated by the Mexican government.
It engages in the exploration, production, refining, transportation, storage, distribution, and sale of crude oil
and natural gas in Mexico. It operates through Exploration and Production; Industrial Transformation;
Logistics; Fertilizers; and Trading Companies segments. It explores and produces crude oil and natural gas
in the northeastern and southeastern regions of Mexico and offshore in the Gulf of Mexico; converts crude
oil into gasoline, jet fuel, diesel, fuel oil, asphalts, and lubricants, as well as distributes and markets these
products in Mexico; and processes wet natural gas to produce dry natural gas, ethane, liquefied petroleum
gas, and other natural gas liquids. In addition, it manufactures ethane derivatives, such as ethylene,
polyethylene, ethylene oxide, and glycols; propylene and derivatives; and oxygen, nitrogen, hydrogen,
butadiene, and other products.

Further, the company offers logistics services comprising land, maritime, pipeline transportation, storage,
and distribution services; generates, supplies, and trades in electric and thermal energy; offers drilling and
well repair services; and sells, buys, and transports crude oil, refined products, and petrochemicals, as well
as provides related risk management, insurance, transportation, and storage services. It also exports its
products. As of December 31, 2020, the company had proved developed reserves of 3,603.4 million barrels
of crude oil, condensates, and liquefiable hydrocarbons; and proved developed dry gas reserves of 3,922.3
billion cubic feet. Petróleos Mexicanos was founded in 1938 and is based in Mexico City, Mexico.

The article below dated July 28, 2020 describes Grupo Diavaz’s business interaction with Pemex.

https://mexicobusiness.news/oilandgas/news/industry-veteran-diavaz-adapts-advances?tag=grupo-
diavaz

Pemex’s Involvement in the Foreign Corrupt Practice Act (“FCPA”) Violation(s)

Pemex was involved in several investigations involving violations of FCPA. Please refer to Section
3. Derogatory Media for details about Pemex’s involvement.

7
https://www.diavaz.com/en/about-us/
8
Capital IQ & https://www.pemex.com/Paginas/default.aspx

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Petróleo Brasileiro S.A. (“Petrobras”)9

www.petrobras.com

Petrobras is a state-owned Brazilian petroleum company headquartered in Rio de Janeiro. It produces and
sells oil and gas in Brazil and internationally. It engages in prospecting, drilling, refining, processing, trading,
and transporting crude oil from producing onshore and offshore oil fields, and shale or other rocks, as well
as oil products, natural gas, and other liquid hydrocarbons. The company operates through Exploration and
Production; Refining, Transportation and Marketing; Gas and Power; and Corporate and Other Businesses
segments. The Exploration and Production segment explores for, develops, and produces crude oil, natural
gas liquids, and natural gas primarily for supplies to the its domestic refineries. The Refining, Transportation
and Marketing segment engages in the refining, logistics, transport, marketing, and trading of crude oil and
oil products; exportation of ethanol; and extraction and processing of shale, as well as holding interests in
petrochemical companies. The Gas and Power segment engages in the logistic and trading of natural gas
and electricity; generation of electricity through thermoelectric power plants; holding interests in
transportation and distribution of natural gas; and fertilizer production business. The Corporate and Other
Businesses segment produces biodiesel and its co-products, and ethanol; and distributes oil products.
Petróleo Brasileiro S.A. - Petrobras was founded in 1953 and is headquartered in Rio de Janeiro, Brazil.

Petrobras’ Foreign Corrupt Practice Act (“FCPA”) Violation(s)

Petrobras had regulatory enforcement due to violation of FCPA. Please refer to Section 4.
Regulatory Enforcement & Sanctions for details about Petrobras’ previous FCPA violation(s).

China Petroleum & Chemical Corporation (“Sinopec”) 10

www.sinopec.com/

Sinopec is a Chinese oil and gas enterprise based in Beijing. It engages in oil and gas, and chemical
operations in the People’s Republic of China. It operates through five segments: Exploration and
Production, Refining, Marketing and Distribution, Chemicals, and Corporate and Others. The company
explores for and develops oil fields; produces crude oil and natural gas; processes and purifies crude oil;
and manufactures and sells petroleum products. It also owns and operates oil depots and service stations;
and distributes and sells refined petroleum products, including gasoline and diesel through wholesale and
retail sales networks. In addition, the company manufactures and sells petrochemical and derivative
petrochemical products; and other chemical products, such as basic organic chemicals, synthetic resins,
synthetic fiber monomers and polymers, synthetic fibers, synthetic rubber, and chemical fertilizers.

9
Capital IQ & https://petrobras.com.br/pt/
10
Capital IQ & http://www.sinopec.com/

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Further, it is involved in the pipeline transportation and sale of petroleum and natural gas; production, sale,
storage, and transportation of refinery, petrochemical, and coal chemical products; import and export of
petroleum products, natural gas, petrochemical and chemical products, and other commodities and
technologies; research, development, and application of technologies and information; production and sale
of catalyst products, lubricant base oil, polyester chips and fibers, plastics, and intermediate petrochemical
products; research, development, production, and sale of ethylene and downstream byproducts; provision
of geophysical and drilling services, as well as well testing and measurement services; manufacturing
production equipment; and coal chemical industry investment management activities. The company was
founded in 2000 and is headquartered in Beijing, the People’s Republic of China. China Petroleum &
Chemical Corporation is a subsidiary of China Petrochemical Corporation.

Sinopec’s Involvement in Corruption Investigations

Sinopec was involved in several investigations involving corruption. Please refer to Section 3.
Derogatory Media for details about Sinopec’s involvement.

Grupo Diavaz, S.A de C.V’s Partnerships with Other Non-NOC Entities

Trafigura Pte Ltd & Trafigura Group Pte. Ltd11

www.trafigura.com

Trafigura Pte Ltd operates as a trader of petroleum and crude oil. Its products include oil and refined
products, non-ferrous metal, iron ore, and coal. The company was incorporated in 1996 and is based in
Singapore. Trafigura Pte Ltd operates as a subsidiary of Trafigura Group Pte. Ltd.

 Trafigura Group Pte. Ltd. engages in trading and transportation of oil and petroleum products,
and metals and minerals in Europe, Asia, North America, Latin America, Africa, Australia, and the
Middle East. The company’s Oil and Petroleum Products segment sources, stores, blends, and
delivers oil and petroleum products, including crude oil, gasoline, fuel oil, middle distillates,
naphtha, liquefied petroleum gas, liquefied natural gas, natural gas, biodiesel, and condensates.
The Metals and Minerals segment trades copper cathodes, copper blister and copper wire rods,
lead, zinc, aluminum, iron ore, nickel, precious metals, and coal in various forms, including ores,
concentrates, and refined metals. This segment is also involved in various stages from mining
through smelting to the finished metals. In addition, this segment is involved in blending metal
concentrates, iron ore, coal, and alumina; and smelting zinc and lead concentrates, as well as
warehousing, transportation, and freight activities. It offers investment solutions; and supplies

11
Capital IQ & https://www.diavaz.com/en/about-us/

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renewable power to electricity grids. The company’s flagship assets comprise MATSA copper mine
in Spain. It serves oil producers, refiners, mining companies, and smelters. The company was
founded in 1993 and is based in Singapore. Trafigura Group Pte. Ltd. is a subsidiary of Trafigura
Beheer B.V.

 Trafigura Trading LLC distributes and markets minerals, oil, and metals. The company provides
crude oil, petroleum products, liquefied natural gas, metals, and metal ores and concentrates.
Additionally, it offers transportation and storage services. Trafigura Trading LLC was formerly
known as Trafigura AG and changed its name to Trafigura Trading LLC in February 2015. The
company was founded in 1995 and is based in Lucerne, Switzerland. Trafigura Trading LLC
operates as a subsidiary of Trafigura Group Pte. Ltd.

Trafigura and its Related Entities Involvement in Corruption Investigations

Trafigura was involved in several investigations of corruption. Please refer to Section 3. Derogatory
Media for details about Trafigura’s involvement.

Glisco Partners II, L.P. a.k.a Glisco Partners Inc. 12

www.gliscopartners.com

Glisco Partner II, L.P. (“Glisco”) is a private equity firm specializing in seed/startup, early venture, mid
venture, late venture, later stage, mature, growth capital and middle-market investments. The firm seeks to
invest in companies based in Mexico and Central America. Glisco Partners Inc. was founded in 2016 and
is based in Mexico City, Mexico. Alfredo Castellanos Heuer is the managing partner at Glisco.

Neogás do Brasil Gás Natural Comprimido S.A. 13

www.neogas.com.br

Neogás do Brasil Gás Natural Comprimido S.A. (“NEOgás”) was established in 2000, with the purpose of
developing technologies related to delivering compressed natural gas for automotive and industrial
applications. With factory located in Caxias do Sul, RS, the Company has commercial offices in Rio de
Janeiro (RJ), as well as distribution operations of natural gas for industrial, automotive, commercial, and
residential use in Peru, Colombia, Mexico, United States, and Brazil.

CSI Compressco LP14

12
Capita IQ, https://www.diavaz.com/en/about-us/
13
Capital IQ & https://neogas.com.br/
14
Capital IQ & https://csicompressco.com

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www.csicompressco.com

CSI Compressco LP provides compression services for natural gas and oil production, gathering, artificial
lift, transmission, processing, and storage companies in the United States, Mexico, Canada, Argentina, and
internationally. The company offers GasJack and VJack electric powered low-horsepower compressor
packages to provide production enhancement services for dry gas wells, liquid-loaded gas wells, and
backside auto injection systems. It also provides medium-horsepower compressor packages to move
natural gas from the wellhead through the field gathering system; and high-horsepower compressor
packages for use in midstream applications, including natural gas gathering and centralized compression
facilities. In addition, the company sells engine parts, compressor package parts, and other components
manufactured by third-party suppliers, as well as provides aftermarket services, such as operations,
maintenance, overhaul, and reconfiguration. Further, it offers well monitoring and sand separation, as well
as early production services. CSI Compressco GP Inc. serves as the general partner of CSI Compressco
LP. The company was formerly known as Compressco Partners, L.P. and changed i ts name to CSI
Compressco LP in December 2014. CSI Compressco LP was founded in 2008 and is headquartered in The
Woodlands, Texas.

Fugro Inc15

www.fugro.com

Fugro Inc. provides marine and land surveying and consulting services. The company offers marine site
characterization including marine geo-consulting, geophysical and hydrographic survey, and
measurements; marine asset integrity such as satellite positioning, construction support, monitoring, and
forecasting; land site characterization including geotechnical ground investigation, testing, monitoring, and
geological surveys; and land asset integrity such as oil and gas digital infrastructure, road ware, mapping,
and weather forecasting services. Additionally, it provides GIS and data management services. The
company was founded in 1980 and is headquartered in Houston, Texas. Fugro (USA), Inc. operates as a
subsidiary of Fugro N.V.

15
Capital IQ & https://fugro.com

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1.3 Key Personnel16

Luis Vazquez Senties, CEO - Diavaz Gas17

Chairman of the Board – Groupo Diavaz
Prior Roles with Public Sector – No
Politically Exposed Person (PEP) – No

Mr. Senties is a founding member of Diavaz Gas and has been a member of the Board of Directors since
1982. He is an advisor of several national and international companies, all of them related to the energy
industry. Mr. Senties is chairman of the Mexican Natural Gas Association and former president and current
member of Mexico's Chapter of the World Energy Council. Vázquez is a chemical engineer; he graduated
from Ryerson University in Toronto18.

Sergio Aceves Borbolla, CEO – Grupo Diavaz19

Prior Roles with Public Sector – Undetermined
Politically Exposed Person (PEP) – No

No biography was identified about Sergio Aceves Borbolla. However, he has been checked against a range
of sources carrying information on potential government and political affiliations. No match was found.

Alfredo Castellano Heuer, Board Member – Grupo Diavaz20

Managing Director - Glisco Partner II, L.P.
Prior Roles with Public Sector – No
Politically Exposed Person (PEP) – No

Mr. Heuer serves as Senior Managing Director at Glisco Partners II, L.P., Evercore Mexico Capital Partners
and Evercore Mexico Capital Partners II, L.P. He serves as Executive Director of Evercore Mexico Capital
Partners Fund III. He served as Managing Director of Evercore Mexico Capital Partners II, L.P.

16
Thomson Reuters, Capital IQ, Dun & Bradstreet
17
Thomson Reuters, Capital IQ, Dun & Bradstreet & https://www.diavaz.com/en
18
https://www.thebusinessyear.com/mexico-2020/luis-vazquez-senties/interview
19
Thomson Reuters, Capital IQ, Dun & Bradstreet & https://www.diavaz.com/en
19
Thomson Reuters, Capital IQ, Dun & Bradstreet & https://www.diavaz.com/en
20
Thomson Reuters, Capital IQ, Dun & Bradstreet & https://www.diavaz.com/en

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Mr. Heuer joined Evercore Mexico's private equity business in 2003, runs Evercore Mexico Capital Partners
and is responsible for fund raising, investment research, due diligence, structuring, execution, and
supervision of the investments. Previously, he founded Actimart. He has 17 years of relevant business
experience with companies in Latin America, specifically in Mexico. Mr. Heuer's previous work experience
includes private equity throughout Latin America at Banc of America Equity Partners; mergers and
acquisitions at BT Wolfensohn; and strategic management consulting at McKinsey and Company.

Mr. Heuer serves on the Boards of Directors of More Pharma, Grupo CP, Iké, and UmbralCapital. He has
been a Director of The Latin American Private Equity & Venture Capital Association since September 30,
2014. He serves as Member of the Board of Directors of LAVCA and Intellego. Mr. Heuer serves as a
Director of Servicios Corporativos Javer, S.A.B. de C.V. He serves as a Director of Grupo Diavaz, S.A. de
C.V. and Premium Dining Hospitality.

Mr. Heuer is a Deputy Director at Grupo Axo, S.A.P.I. de C.V. Mr. Heuer is fluent in Spanish, English, and
French. He holds a B.A. in Economics from Instituto Tecnológico Autónomo de México (ITAM) and an
M.B.A. from Harvard Business School.21

21
https://www.thebusinessyear.com/mexico-2020/luis-vazquez-senties/interview

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2. Potential Government & Political Affiliation22

Diavaz Gas and Grupo Diavaz, their key personnel, and related entities have been checked against a range
of sources carrying information on potential government and political affiliations. No matches were found.

3. Derogatory Media23

Diavaz Gas and Grupo Diavaz and their key personnel have been checked against a range of sources
carrying information on potential derogatory media. No matches were found.

However, following information found related to Diavaz’s business partners.

Petroleos Mexicanos ("PEMEX")

Petroleos Mexicanos ("PEMEX") Involvement in Braskem Corruption Investigation

News Article Dated on March 15, 2021

“Brazil’s Braskem Probes Bribery Claims in Mexico”

https://www.wsj.com/articles/brazils-braskem-probes-bribery-claims-in-mexico-11615831470

“Brask em SA has opened an internal investigation into bribery allegations made last year by the
former chief executive of Mexico’s state-run oil company, according to a securities disclosure. The
Brazilian petrochemical company said in a filing Friday that it hired an unnamed U.S. law firm to
review the claims by Emilio Lozoya, the former CEO of Petróleos Mexicanos, also k nown as
Pemex. Testimony that Mr. Lozoya gave to Mexico’s Attorney General’s Office, including
allegations involving Braskem’s parent company, was leaked to the press last year, adding fuel to
what has become the widest-reaching corruption probe in Mexico’s modern history..”

Stanford Law School’s Information and Summary of the Investigation into Braskem Idesa's
Activities in Mexico

https://fcpa.stanford.edu/investigation.html?id=430
“In July 2020, Spain extradited Emilio Lozoya, a former CEO for PEMEX, to Mexico on allegations
of his involvement in the Odebrecht bribery scandal, a wide ranging bribery scheme involving
multiple countries which resulted in large FCPA enforcement actions against Odebrecht and
Brask em in 2016. Upon his return to Mexico, Lozoya was interviewed by the Mexican attorney
general, and according to media reports at the time, Lozoya implicated Braskem in a separate
bribery scheme involving Braskem Idesa, a joint venture between Braskem and Grupo Idesa that
produced polyethylene. According to the reports of Lozoya's testimony, PEMEX had entered into

22
Thomson Reuters and search of open source data.
23
Thomson Reuters and search of open source data.

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a contract with Braskem Idesa that was extremely favorable to Braskem Idesa and that bribes had
been paid as part of that contract.”24

Petroleos Mexicanos ("PEMEX") Involvement in Odebrech Corruption Investigation

News Article Dated on June 26, 2019

“Maybe It’s Real This Time: Mexico Fights Corruption”

https://www.velaw.com/insights/maybe-its-real-this-time-mexico-fights-corruption/

“In May 2019, delivering on his central campaign promise to target corruption in Mexico, Mexico
President Andrés Manuel López Obrador’s administration launched an investigation into Emilio
Lozoya Austin, former CEO of Mexican state-owned oil and gas company Petróleos Mexicanos
(“Pemex”) for alleged fraud, money laundering, and bribery. The allegations revolve around
Pemex’s 2014 purchase of a rundown and abandoned fertilizer plant for $475 million US from Altos
Hornos de México (“AHMSA”), one of Mexico’s largest multinational companies. Mexican
prosecutors are alleging that the plant’s price was severely inflated and that bribery played a role
in securing the transaction.”

Stanford Law School’s Information and Summary of Investigation into Braskem Idesa's Activities
in Mexico

https://fcpa.stanford.edu/investigation.html?id=369

“On December 21, 2016, the Brazilian company Odebrecht S.A. settled an FCPA enforcement
action with the DOJ. The misconduct at issue in the enforcement action involved bribes paid for
more than 100 projects in twelve countries. Bribes totaling $10.5 million paid to high-level Mexican
officials were among the bribes paid by Odebrecht. On December 22, 2016, the Liabilities Unit of
PEMEX initiated an internal investigation into bribery or corruption related to the allegations in the
Odebrecht enforcement action. According to its SEC filings, PEMEX collaborated in the
investigation with the Mexican Ministry of Public Function and the Mexican Federal Attorney
General’s Office in order to hold accountable those responsible for the misconduct and ensure that
the company recover any damages to which it was entitled.”25

24
https://fcpa.stanford.edu/investigation.html?id=430
25
https://fcpa.stanford.edu/investigation.html?id=369

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Petróleo Brasileiro S.A. ("Petrobas")

Petróleo Brasileiro S.A. ("Petrobas") Involvement in Amec Foster Wheeler Limited

Corruption Investigation

Stanford Law School’s Information and Summary of the matter of Amec Foster Wheeler Limited

https://fcpa.stanford.edu/enforcement-action.html?id=840

“According to the documents in this case, between 2012 and 2014, Foster Wheeler’s UK
subsidiary, Foster Wheeler Energy Limited (“FWEL”) made improper payments to Brazilian
officials in connection with efforts to win a contract with the Brazilian state-owned oil company,
Petroleo Brasileiro S.A. – Petrobras. The bribes were made through third party agents, including
one agent connected with the Monaco-based intermediary Unaoil who failed Foster Wheeler’s
due diligence process for prospective sales agents. Foster Wheeler, through FWEL, paid
approximately $1.1 million in bribes in connection with the Brazilian contract. None of the
improper payments were accurately reflected in Foster Wheeler’s books and records, and the
company's internal accounting controls were insufficient to detect or prevent the misconduct. In
all, Foster Wheeler obtained a benefit of over $17.6 million.

In a settled administrative proceeding initiated on June 25, 2021, the SEC ordered Amec Foster
Wheeler to cease and desist violations of the anti-bribery, books and records, and internal
controls provisions of the FCPA. The SEC further ordered Amec Foster Wheeler to pay
disgorgement of $17,656,302 and prejudgment interest of $5,107,985, for a total of $22,764,287.
However, the SEC agreed to offset up to $12,636,975 in disgorgement paid to authorities in Brazil
and the U.K. The SEC noted Amec Foster Wheeler and Wood's cooperation and remediation.”26

In the Matter of AMEC FOSTER WHEELER LIMITED, ORDER INSTITUTING CEASE-AND

DESIST PROCEEDINGS PURSUANT TO SECTION 21C OF THE SECURITIES EXCHANGE
ACT OF 1934, MAKING FINDINGS, AND IMPOSING A CEASEAND-DESIST ORDER

https://www.sec.gov/litigation/admin/2021/34-92259.pdf

“These proceedings arise out of a bribery scheme to obtain an oil and gas engineering and
design contract in Brazil by respondent Amec Foster Wheeler Limited (“Amec Foster Wheeler”),
formerly Foster Wheeler AG (collectively “Foster Wheeler”), a company that provided project,
engineering, and technical services to energy and industrial markets in over 30 countries. From
2012 through 2014, Foster Wheeler’s UK subsidiary, Foster Wheeler Energy Limited (“FWEL”)
made improper payments to Brazilian officials in connection with efforts to win a contract with the
Brazilian state-owned oil company, Petróleo Brasileiro S.A. – Petrobras (“Petrobras”). The bribes

26
https://fcpa.stanford.edu/enforcement-action.html?id=840

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were made through third party agents, including one agent who failed Foster Wheeler’s due
diligence process for prospective sales agents, but was allowed to “unofficially” continue work ing
on the project. Foster Wheeler, through FWEL, paid approximately $1.1 million in bribes in
connection with the Brazilian contract. None of the improper payments were accurately reflected
in Foster Wheeler’s books and records and it failed to have sufficient internal accounting controls
in place to detect or prevent the misconduct. Foster Wheeler obtained a benefit of over $17.6
million. As a result of this conduct, Foster Wheeler violated the anti-bribery, books and records,
and internal accounting controls provisions of the Foreign Corrupt Practices Act of 1977.”

China Petroleum & Chemical Corporation (“Sinopec”)

Sinopec’s Involvement in Corruption Investigations

News Article Dated on May 24, 2021

“China says former Sinopec executive under probe for graft”

https://www.nasdaq.com/articles/china-says-former-sinopec-executive-under-probe-for-graft-
2021-05-24

“…A former top executive of China Petrochemical Corp, or Sinopec Group, is under investigation
for suspected serious "disciplinary violations", according to a statement by China's top anti-
corruption watchdog on Monday. Zhang Haichao retired in 2017 as a deputy general manager of
Sinopec, parent company of Sinopec Corp 0386.HK, and prior to that a vice president of Sinopec
Corp in charge of fuel mark eting, the China Central Discipline Inspection Commission said on its
website..”

News Article Dated on January 23, 2017

“China jails former Sinopec president for 15-1/2 years over graft”

https://www.reuters.com/article/us-china-corruption-sinopec/china-jails-former-sinopec-president-
for-15-1-2-years-over-graft-idUSKBN1580AA

“…A Chinese court has jailed Wang Tianpu, the former president of energy giant Sinopec Group,
for 15-1/2 years for graft, state media reported on Tuesday, citing a court verdict. Wang, who took
top positions at Sinopec Group between 2003 and 2014, was found guilty of accepting bribes of
about 33.48 million yuan ($4.9 million) and embezzling state properties worth 795,934 yuan
($116,063), state news agency Xinhua said..”

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Trafigura Pte Ltd & Trafigura Group Pte. Ltd

Trafigura’s Involvement in Corruption Investigations

News Article Dated on August 22, 2021

“..Mexico bans Vitol, Trafigura from new oil trades on corruption allegations..”

https://www.worldoil.com/news/2021/8/20/mexico-bans-vitol-trafigura-from-new-oil-trades-on-
corruption-allegations

“Vitol Group and Trafigura Group -- both barred from new oil-trading business with Mexico’s state
producer for alleged corruption -- will be subject to the ban until at least the end of 2024 while the
government reviews the conduct of other commodity traders, Energy Minister Rocio Nahle said.
Pemex won’t give new work to Vitol and Trafigura, two of the world’s largest commodity trading
houses, for at least the remainder of Andres Manuel Lopez Obrador’s six-year term, Nahle told
Bloomberg News during an interview. The Mexican government is reviewing other oil-trading firms’
conduct and will suspend work with any company found to have committed wrong doing, she said.In
recent years, the world’s most powerful commodity traders have faced bribery and corruption
investigations in a worldwide crack down that has spanned jurisdictions from the U.S. and
Switzerland to Brazil and Mexico. Lopez Obrador swept to power on pledges to revive Mexico’s
state oil giant to its former glory and reduce the influence of private energy operators that he often
characterized as corrupt..”

News Article Dated on July 15, 2021

“Pemex’s trading arm bans new business with Trafigura”

https://www.reuters.com/business/energy/exclusive-pemexs-trading-arm-bans-new-business-
with-trafigura-sources-2021-07-15/

“The commercial arm of Mexican state oil company Petroleos Mexicanos (Pemex) has temporarily
banned new business with Trafigura AG, according to a document and a source, as investigations
into the energy trader’s conduct in several countries deepen. The world’s largest independent
commodity traders are facing scrutiny globally for alleged corruption after years of investigations
into bribes of public officials in several countries in Latin America.”

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News Article Dated on November 20, 2020

“Brazil prosecutors sue Trafigura over irregular Petrobras contracts: statement”

https://www.reuters.com/article/us-brazil-corruption-trafigura/brazil-prosecutors-sue-trafigura-
over-irregular-petrobras-contracts-statement-idUSKBN28A376

“…Brazilian federal prosecutors have filed a lawsuit seek ing damages from oil trading company
Trafigura and former executives on corruption allegations involving Brazilian state-run oil company
Petroleo Brasileiro SA (Petrobras)..”

4. Sanctions & Regulatory Issues27

Diavaz Gas and Grupo Diavaz and their key personnel, have been checked against a range of sources
carrying information on sanctions. No matches were found.

However, following information found related to Diavaz’s business partnership(s).

Petróleo Brasileiro S.A. ("Petrobas") FCPA Settlement

According to Petrobas annual reports filed with the SEC in 2009, the Brazilian federal police
began an investigation called 'Lava Jato' (Car Wash) aimed at criminal organizations engaged in
money laundering in several Brazilian states. The Lava Jato investigation is extremely broad and
involves numerous investigations into several criminal practices focusing on crimes committed by
individuals in different parts of the country and sectors of the Brazilian economy. Beginning in
2014, and over the course of 2015, the Brazilian Federal Prosecutor’s Office focused part of its
investigation on irregularities involving Petrobras’s contractors and suppliers and uncovered a
broad payment scheme that involved a wide range of participants, including former Petrobras
personnel. Based on the information available to Petrobras, the payment scheme involved a
group of companies that, between 2004 and April 2012, colluded to obtain contracts with
Petrobras, overcharge the Company under those contracts and use the overpayment received
under the contracts to fund improper payments to political parties, elected officials or other public
officials, individual contractor personnel, former Petrobras personnel and other individuals
involved in the scheme. Petrobras refers to this scheme as the 'payment scheme' and to the
companies involved in the scheme as 'cartel members'.

On September 27, 2018, both the DOJ and SEC announced a global settlement with Petrobras.
Under the terms of the settlement, Petrobras agreed to pay approximately $1.7 billion to resolve
the FCPA investigation into the company. Approximately $170 million was paid to the DOJ and

27
Thomson Reuters and search of open source data.

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SEC, $683 million to Brazilian authorities, and the remainder was disgorgement that was credited
against a large settlement in a securities class action filed against the company.28

The details of the Department of Justices’ settlement can be found within the link below.

https://www.justice.gov/opa/pr/petr-leo-brasileiro-sa-petrobras-agrees-pay-more-850-million-fcpa-
violations

5. Litigation Matters29

Diavaz Gas and Grupo Diavaz, their key personnel, and related entities have been checked against a range
of sources carrying information on litigation and regulatory issues. No matches were found.

28
https://fcpa.stanford.edu/investigation.html?id=107
29
Thomson Reuters and search of open source data.

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