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New allegations made against Brazil’s Petrobras

August 5, 2014

SAO PAULO (AP) — The president of a Senate commission probing suspected irregularities by Brazil’s state-controlled Petrobras oil company will investigate allegations that company directors were tipped beforehand what questions the commission would ask them, his spokesman said Tuesday.

Eduardo Costa, the spokesman for Senator Vital do Rego said the senator will order an investigation into the allegations made this week by the Veja newsweekly magazine that members of the commission supplied the questions to Petrobras president Graca Foster and other executives and helped them elaborate answers.

The commission is investigating Petrobras’ 2006 purchase of the Pasadena Refining System.

In 2006, Petrobras paid Belgium’s Astra Oil $360 million for a 50 percent stake of the Pasadena Refining System. One year later, Astra Oil exercised a so-called “put option” to get Petrobras to buy the remaining 50 percent stake. The Brazilian company refused, but in 2012 it lost an arbitration case in the United States. Interest payments and legal fees brought the price tag for the remaining stake in the refinery to $820.5 million

In the end, Petrobras paid $1.18 billion for a refinery that had cost Astra $42.5 million in 2005.

The commission is also investigating allegations that, several years ago, Petrobras officials accepted bribes from SBM Offshore, a Netherlands-based supplier of offshore oil vessels.

Petrobras acknowledged in a statement posted Monday night on its website that it provided “simulated questions and answers” to its executives.

“Petrobras always guarantees its support to current and former executives, preparing them whenever necessary with simulated questions and answers.”

The company said that its simulated answers and questions were based on the list of the commission’s topics posted on the Senate’s website.

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