Brazil Senate Examining Petrobras Scandal

Posted by Eric Haun
Wednesday, May 14, 2014
Photo courtesy Petrobras

Brazil's Senate opened an inquiry on Wednesday into alleged corruption and mismanagement at state-run oil company Petroleo Brasileiro SA, a probe that could complicate President Dilma Rousseff's bid for reelection in October.

A panel of senators will look into the costly purchase of a refinery in Pasadena, Texas, for which critics say Petrobras paid 20 times the market value.

The senators will also probe allegations that Petrobras officials took bribes in exchange for steering contracts to SBM Offshore NV, a Dutch oil-production ship leasing company, as well as investigating alleged overpricing in the building of refineries in Brazil.

The hearings will fan unwelcome controversy for Rousseff, who was chairwoman of the Petrobras board when the Pasadena refinery deal was signed in 2006. Her energy policies since taking office, including controls on gasoline prices in Brazil, have also eroded the company's profitability.

Fallout from the Petrobras scandal has helped bring down Rousseff's approval ratings as she gears up to seek a second term in a tighter-than-expected presidential race.

Opposition senators, however, boycotted the Senate inquiry because they are holding out for a joint-chamber congressional probe that would be harder for the government to control. The lower house of Congress could vote on Thursday for a bicameral inquiry, which in practice would supersede the Senate inquiry.

Rousseff said in March that the board she headed approved the $370 million purchase of a 50 percent stake in Pasadena Refining System Inc from Belgium's Astra Oil Trading NV. She said she was unaware of a put option that forced Petrobras to buy the remaining stake as part of a $820.5 million legal settlement.

The current chairman of the board, Finance Minister Guido Mantega, told a congressional hearing on Wednesday that he opposed the purchase of the remaining 50 percent of the refinery but the case went to arbitration and Petrobras lost.

The Petrobras scandal has provided opponents with ammunition to shoot down Rousseff's reputation as a good manager with no tolerance for corruption. The allegations have added to the criticism of the performance of Petrobras since Rousseff took office in 2010.

Petrobras has the highest debt levels and lowest profitability of any major oil company. Its market value has shrunk to about $100 billion from $226 billion in 2010 as the company failed to deliver on ambitious offshore expansion plans.

Profit fell 30 percent in the first quarter as refining and fuel losses rose as oil output fell.

Critics say the government, by controlling domestic fuel prices to keep inflation in check, is starving Petrobras of the cash it needs to finance its $221 billion five-year expansion plan.

Unable to meet demand for gasoline and diesel from its Brazilian refineries, it has had to import. The fuel-price policy forces it to sell the imports at a loss.

(Reporting by Anthony Boadle; Editing by Peter Galloway)
 

Maritime Reporter February 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

First Subsea Achieves API 17L1 Certification for Bend Stiffener Connectors

Connector technology developer First Subsea has received APL 17LI certification for its bend stiffener connectors from the American Petroleum Institute, the company announced today.

Gulf of Mexico Sees First LNG-powered OSV

A special Offshore Supply Vessel (OSV) has been delivered to Shell for its deepwater operations in the Gulf of Mexico.   The vessel, Harvey Energy, is chartered

Bestobell Bags Hat Trick Order in China

Bestobell Marine, part of the President Engineering Group, has received its third order in the past 12 months from Hudong Zhonghua shipyard in China. The deal

Legal

Senate Committee Approves Vessel Discharge Reform Legislation

The effort to establish a uniform national framework for the regulation of vessel discharges took another step forward as the Senate Committee on Commerce, Science and Transportation approved S.

UK Will Force Fridman to sell N.Sea Assets

Britain is ready to force the sale of Russian oligarch Mikhail Fridman's recently acquired North Sea energy assets unless it receives unspecified assurances within the next week,

General Dynamics Board Increases Dividend

The board of directors of General Dynamics today declared a regular quarterly dividend of 69 cents per share on the company's common stock, payable May 8, 2015,

News

Senate Committee Approves Vessel Discharge Reform Legislation

The effort to establish a uniform national framework for the regulation of vessel discharges took another step forward as the Senate Committee on Commerce, Science and Transportation approved S.

Vancouver Port Operations Resume Atfer Container Fire

Port Metro Vancouver said on Thursday that operations had resumed at most port facilities shut down by a shipping container fire the day before, but that its Centerm

Stronger Panamaxes Boost Baltic Sea Freight Index

The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry bulk commodities, made minor gains on Thursday on higher rates for the panamax and smaller vessel segments.

Government Update

Senate Committee Approves Vessel Discharge Reform Legislation

The effort to establish a uniform national framework for the regulation of vessel discharges took another step forward as the Senate Committee on Commerce, Science and Transportation approved S.

Egypt: Suez Canal Zone to Make Up 30-35% of Economy

Egypt expects a planned economic zone near the Suez Canal to eventually make up about a third of Egypt's economy, the country's investment minister said on Thursday.

Australia Announces Patrol Boat Tender

Tender announced for Pacific Patrol Boat Replacement Project   The Australian Government announced a Request for Tender (RFT) to replace the Pacific Patrol Boats

Offshore Energy

Maersk Oil Hires Ampelmann Gangway System

After having performed a walk to work (W2W) campaign in the summer of 2014, Motion Compensation Gangways (MCG) developer Ampelmann has again been awarded a contract

Lamprell Delivers Jackup Rig to Greatship

Lamprell announced it has completed construction on jackup drilling rig Greatdrill Chaaru, delivering the rig to Greatship Global Energy Services Pte. Ltd.    Greatdrill

Ensco Announces Cash Tender Offer

Ensco plc announced today that it has commenced a cash tender offer to purchase any and all of its outstanding 3.25% Senior Notes due 2016 (CUSIP No. 29358QAB5).

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Maritime Standards Navigation Pipelines Pod Propulsion Ship Electronics Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2328 sec (4 req/sec)