A Review of the Nigerian Energy Industry

Top suspect in Vitol, Glencore Brazil bribery case arrested in U.S. – Court

*Arrested for bribery.

10 January 2019, Sao Paulo — A Brazilian man facing allegations of bribing officials at state-run oil company Petroleo Brasileiro SA on behalf of Vitol Group, Glencore and other major oil trading firms have been arrested in the United States, authorities said Tuesday.

Luiz Eduardo Loureiro Andrade was detained in the United States on Dec. 20, an arrest that was disclosed in a Brazilian court document seen by Reuters. He was arrested with the help of U.S. Immigration and Customs Enforcement (ICE). Besides handling deportation cases, ICE investigates the transnational crime.

An email included in the court document from a Brazilian federal police official based in Miami indicated that Andrade is being held in an undisclosed location in the United States and that Brazil has requested his extradition. It was not clear when he may be sent back to Brazil.

ICE did not respond to requests for comment. An investigator with Brazil’s federal police confirmed the arrest on condition that they not be named as they were not authorized to speak with the press but declined to provide more details.

Andrade was charged in Brazil for acting as a middleman between top executives at Vitol, allegedly funneling bribes to Petrobras officials in exchange for sweetheart deals from the state-run firm. Officials allege that he also carried out the same services for Glencore and other big oil trading firms to win sweetheart contracts with Petrobras.

Two former executives of Trafigura was charged in the same scheme on Dec. 14.

A Vitol spokeswoman declined to comment on Tuesday but said the company would always cooperate with investigators.

A Glencore spokesman said the firm took ethics and compliance seriously but could not comment further. He added that Glencore would cooperate with Brazilian authorities.

The stakes are high for both trading firms.

Brazilian prosecutors allege some of the crimes were carried out by Petrobras traders based in Houston and that some illicit funds moved through the U.S. and European banking systems, raising the chance that jurisdiction for investigating the case could widen. Brazilian and U.S. prosecutors have worked closely in the past on Car Wash cases.

The probe has already frozen current business for the trading firms in Brazil, an increasingly important global oil producer, but not yet a major source of revenue for the firms.

Trafigura said its turnover in Brazil last year was $300 million, a fraction of its overall revenue of $136 billion in 2017. Glencore and Vitol would not provide revenue details but said Brazil was a minor market.

Vitol has a deal pending to purchase a stake in Petrobras’ prized Nigerian oilfields. Petrobras has said there are no indications of wrongdoing in that deal, but it would be up to Brazilian regulators to make the final determination.

*Brad Brooks; Julia Payne; Editing: Christian Plumb; David Gregorio & Dale Hudson – Reuters

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