A Review of the Nigerian Energy Industry

Petrobras board ‘cleared of refinery wrongdoing’

Maria das Graças- Foster, CEO, Petrobras

25 July 2014, News Wires – Brazil’s top public prosecutor has cleared Petrobras board members of wrongdoing in approving the 2006 purchase of an oil refinery in Pasadena, Texas, according to a report.

Board members who approved the sale included chairwoman Dilma Rousseff, who is now president of Brazil, Reuters reported.

The purchase of the refinery became the subject of criminal and congressional investigations earlier this year after politicians raised concerns about how the oil company’s investment in the refinery ballooned – from $360 million in 2006 to nearly $2 billion today.

The investigations gained momentum after the arrest earlier this year of Paulo Roberto da Costa, former head of refining at Petrobras, as the oil company is known. Da Costa was arrested as part of a money-laundering probe.

While the prosecutor cleared board members, Brazil’s federal accounts auditor, the TCU, said later on Tuesday that it has opened a formal probe into alleged financial irregularities in the approval of the Pasadena refinery purchase.

If any irregularities are found, board members including former chief executive Jose Sergio Gabrielli could be ordered to repay nearly $792 million to Petrobras, the TCU said. Other current and former employees cited include Chief Financial Officer Almir Barbassa and da Costa.

While the TCU mentioned Gabrielli and other Petrobras employees as targets of the probe, Rousseff’s name was not included in the documents related to the TCU case.

The prosecutor, who is based in the capital Brasilia, also instructed the federal prosecutor’s office to direct any future investigations into the refinery deal to prosecutors in Rio de Janeiro, where Petrobras is based.

Petrobras preferred shares, the company’s most-traded class of stock, fell 3.47% to 20.32 reais in Sao Paulo trading on Wednesday, their first decline in 11 days and biggest one-day drop in a month.


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