[46] PETROBRAS [12] NEW YORK TIMES DESTACA ESCÂNDALOS E DERROCADA DO VALOR DE MERCADO DA MAIOR EMPRESA DO BRASIL

PETROBRAS [12] NEW YORK TIMES DESTACA ESCÂNDALOS E DERROCADA DO VALOR DE MERCADO DA MAIOR EMPRESA DO BRASIL

PETROBRAS by The New York Times:

http://topics.nytimes.com/top/news/business/companies/petroleo-brasileiro-sa-petrobras/index.html

[NYT-01]

Petroleo Brasileiro SA Petrobras

PBR: NYSE; Energy/Integrated Oil & Gas

OTHER EXCHANGES: Sao Paulo, Mexico, More »

News about Petroleo Brasileiro SA Petrobras, including commentary and archival articles published in The New York Times.

 

COMPANY INFORMATION

Petroleo Brasileiro SA Petrobras (Petrobras) is a Brazil-based integrated oil and gas company. The Company divides its activities into seven segments: Exploration and Production; Refining, Transportation and Marketing; Gas and Power; Biofuel; Distribution and International. Directly or through its subsidiaries, Petrobras is engaged in the research, extraction, refining, processing, trade and transport of oil from wells, shale and other rocks, its derivatives, natural gas and other liquid hydrocarbons, as well as in activities related to energy, development, production, transport, distribution and commercialization of energy. The Company's offering comprises road transportation products such as Automotive Gasoline, Diesel Fuel, Natural Vehicular Gas, Lubrax; agriculture and cattle raising products such as Sunflower Meal, among others; Industrial products such as Solvents and Paraffins, among others. The Company provides its services both for individual and business clients.

Petroleo Brasileiro SA Petrobras
24 andar Av. Republica do Chile, no. 65, Centro Rio de Janeiro 20031912 Brazil
Phone: +55 (213) 224-1510
Fax: +55 (213) 224-9999

Web site

[NYT-02]

Petrobras Executives Quit Amid Scandal

Source: The New York Times

By SIMON ROMEROFEB. 4, 2015

http://www.nytimes.com/2015/02/05/world/americas/petrobras-executives-leaving-amid-brazilian-graft-scandal.html?ref=topics&_r=0

BUENOS AIRES — The leadership of Petrobras, the Brazilian national oil giant grappling with a sprawling graft scandal, abruptly resigned on Wednesday amid accusations of a bribery scheme involving kickbacks to President Dilma Rousseff’s governing Workers Party and its allies.

The shake-up included the departure of Maria das Graças Foster, the chief executivehandpicked in 2012 by Ms. Rousseff, after months of tumult at the state-controlled oil company. Skepticism had grown over Ms. Foster’s capacity to deal with the scandal at a time when low oil prices are also forcing the company to slash spending on costly projects.

Ms. Rousseff had recently decided to replace Ms. Foster and other senior executives this month, according to news reports, fueling a surge in Petrobras shares. The newspaper O Globoreported on Wednesday that Ms. Foster insisted on resigning after meeting on Tuesday with the president in Brasília.

Reflecting a low point for Ms. Rousseff, who narrowly won re-election in October after a bitter campaign marked by attacks on her management of Petrobras and of Brazil’s sluggish economy, even some within her own party said she had been too slow to make changes at the oil company.

“In my opinion this move should have been taken some time ago,” Paulo Pimenta, a congressman from the Workers Party, told reporters in Brasília.

The upheaval at Petrobras was set off largely by testimony from Paulo Roberto Costa, a former executive at the oil company who was arrested by the police in 2014. As part of a plea deal, he surrendered $25 million hidden in offshore accounts, offering a rare glimpse into the inner workings of Petrobras, a company that long had an almost mythic nationalist aura in Brazil.

Mr. Costa described a scheme in which Petrobras inflated budgets for oil projects and construction companies paid bribes worth about 3 percent of the value of the projects to obtain contracts. The funds were then distributed among senior Petrobras executives and channeled to the Workers Party and other parties in Ms. Rousseff’s governing coalition, Mr. Costa said.

The investigation of the scheme has already involved the arrest and imprisonment of senior executives at some of Brazil’s largest construction companies, a highly unusual development in a country where powerful business figures rarely spend time in jail. The steady drip of testimony from some of the executives suggests the scandal is far from over.

“The mudslide is now at Dilma’s door,” said David Fleischer, professor emeritus of political science at the University of Brasília, referring to the president informally by her first name, as is common in Brazil. “She ousted Foster, who asked to resign some time ago, because she had no other alternative.”

With Petrobras, a publicly traded company with investors around the world, coming under more scrutiny, the Securities and Exchange Commission and the Justice Department in the United States are also investigating the corruption revelations. Meanwhile, credit rating agencies have expressed growing concern over the oil giant’s problems.

It remains unclear how Ms. Rousseff, who resisted pressure for weeks to remove Ms. Foster, will handle the thorny task of replacing her and other senior executives. The firm said in a statement that its board, which is controlled by Brazil’s government, would meet Friday in Rio de Janeiro to choose replacements.

A version of this article appears in print on February 5, 2015, on page A9 of the New York edition with the headline: Petrobras Executives Quit Amid Scandal.

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[NYT-03]

Brazil Prepares Indictments in Oil Company Graft Case

Source: The New York Times

By SIMON ROMERODEC. 7, 2014

http://www.nytimes.com/2014/12/08/world/americas/brazil-to-indict-key-figures-in-oil-company-graft-scandal.html?ref=topics

RIO DE JANEIRO — Brazil’s prosecutor general said over the weekend that he was preparing to indict at least 11 executives from the country’s largest construction companies on charges including bribery and money laundering, in connection with a graft scandal shakingBrazil’s oil industry and the government of President Dilma Rousseff.

In pressing ahead with the case, Rodrigo Janot, the prosecutor general, is opening the way for a trial that would focus scrutiny on growing testimony about a web of illicit dealings between former executives at Petrobras, the state-controlled oil company, powerful contractors and political figures in Ms. Rousseff’s government.

“We are following the money and we will reach all of these perpetrators,” Mr. Janot said Saturday night in an interview with the Globo television network.

The scandal, which involves claims of bribes to obtain contracts with Petrobras, stunned Brazil’s business establishment in November, when police arrested the executives and transferred them to a jail in the southern city of Curitiba. If testimony already obtained in the case is proven true, the case would dwarf previous corruption scandals in Brazil.

In a country where business executives rarely spend time in jail, corporate leaders including José Adelmário Pinheiro Filho, the chief executive of the construction giant OAS, and Dalton dos Santos Avancini and João Ricardo Auler, top executives at Camargo Corrêa, a rival construction group, have awaited their fate in the Curitiba jail since the mid-November arrests.

Disclosures at each step in the case are shaking Petrobras, Brazil’s largest corporation, while opening Ms. Rousseff, the president and a former energy minister and the company’s former board chairwoman, to claims of responsibility for, at the very least, lax oversight.

Pedro Barusco, once an obscure, third-tier executive at Petrobras, has agreed to return about $100 million in bribes related to his time at the company, a disclosure that could rank him among the largest known bribery recipients in Brazil’s history. Separately, Augusto Mendonça, an executive at Toyo Setal, a shipbuilding company, testified last week that he paid more than $23 million in bribes directly to the governing Workers Party and to Petrobras executives in exchange for contracts to build oil tankers.

A new opinion survey released on Sunday by Datafolha, a prominent Brazilian polling company, showed that 68 percent of Brazilians hold Ms. Rousseff responsible for the bribery scandal. At the same time, Ms. Rousseff, who narrowly won re-election in October, has an approval rating of 42 percent, the survey showed. The poll, conducted in 2,896 interviews on Dec. 2 and 3, has a margin of sampling error of plus or minus two percentage points.

Mr. Janot, the prosecutor general, came under pressure over the weekend after a report in the magazine Isto É claimed he had offered the contractors a deal in which they would accept responsibility for some illicit activities while effectively shielding Ms. Rousseff’s government from coming under greater legal scrutiny over bribery claims.

In a statement, Mr. Janot did not explicitly refer to the magazine article, but said he would resist attempts to discredit the investigations of those involved in the bribery scandal. He added that he would comply with his constitutional duty to independently examine testimony and evidence in the case under Brazilian law.

Correction: December 7, 2014 

An earlier version of a summary with this article misspelled the surname of the president of Brazil. She is Dilma Rousseff, not Rouseff.

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RELATED COVERAGE

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Brazil’s Star, Petrobras, Is Hobbled by Scandal and StagnationAPRIL 15, 2014

[NYT-04]

Brazil’s Star, PETROBRAS, Is Hobbled by Scandal and Stagnation

Source: The New York Times

By SIMON ROMERO and LANDON THOMAS Jr.APRIL 15, 2014

http://www.nytimes.com/2014/04/16/business/international/brazils-star-petrobras-is-hobbled-by-scandal-and-stagnation.html

RIO DE JANEIRO — No company has embodied Brazil’s rise like the oil giant Petrobras.

Bolstered by some of this century’s largest oil discoveries, Petrobras soared into the top ranks of global energy producers. Executives at the state-controlled company boasted that it could even outstrip Apple as the world’s most valuable publicly traded company. Political leaders here said Brazil was on the cusp of energy independence.

Now Petrobras is coming to symbolize something else entirely: the disarray afflicting Brazil’s sluggish economy and the reassessment of growth prospects in emerging markets around the world.

Instead of surging, Petrobras’s oil production has stagnated, heightening Brazil’s reliance on imported oil. Petrobras finds itself mired in corruption investigations and claims of managerial incompetence. And its debt load is exploding: Petrobras now ranks as the world’s most indebted company, dependent, more or less, on United States mutual funds to finance its ambitious investment plans.

Photo

A view of Petrobras’s Abreu e Lima oil refinery, currently under construction in the Brazilian state of Pernambuco. The refinery’s estimated cost has risen to $18.5 billion from an initial $2.5 billion. Investigators are looking into whether bribery was involved.CreditYasuyoshi Chiba/Agence France-Presse — Getty Images

“The decline of Petrobras has been stunning, swift and painful,” said Fábio Fuzetti, a partner at Antares Capital Management, a São Paulo investment firm. “This is the energy company that served as the model for others in developing countries,” he said. “Now it’s the example of precisely what not to do.”

Despite these problems, executives at Petrobras point out that the company still has clear strengths. The company, which remains profitable over all despite mounting losses from importing fuel, is a pioneer in deep-sea exploration. And Petrobras commands coveted assets around the world, including oil and gas reserves of about 13 billion barrels.

In a statement, a spokeswoman for Petrobas said that debt levels had climbed as the company invests in offshore oil and expanding refining capacity. “We’ll have an inflection point in our debt starting in 2015, when revenue generation will surpass investment, initiating a trajectory of debt reduction,” said Paula Almada, the spokeswoman.

Pointing to the tension building over Petrobras’s woes, senators grilled the company’s chief executive, Maria das Graças Foster, on Tuesday. She contended that losses related to a controversial Houston refinery deal were being overestimated. Defending the company’s strategies, she said, “No operation is 100 percent safe.”

So far foreign bondholders, who now fund a record 43 percent of the company’s giant investment program, have been remarkably patient. But analysts warn that much of this largess has been driven by the global liquidity glut. If Petrobras’s troubles continue to mount, it could run into resistance on international markets.

The ills that plague Petrobras — too much debt and spending for too little return — reflect a larger concern that the golden age for Brazil, China, Russia and Turkey, once the vanguard of the emerging-market boom, is coming to an end.

“The problem with Brazil is that the days of 4 percent growth are gone,” said Tony Volpon, a Latin America expert at Nomura Securities, who expects the country’s economy to expand at well below 2 percent this year.

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The problems at Petrobras, which is 60.5 percent owned by Brazil’s government, have come into sharp relief in recent weeks as the company grapples with a simmering scandal over its acquisition of a Houston refinery, beginning in 2006 and completed years later, at an estimated cost of $1.19 billion from Astra, a Belgian oil trading company that bought the refinery for just $42.5 million in 2005.

Police here also recently arrested one of Petrobras’s most powerful former executives, Paulo Roberto Costa, who led refining operations until 2012. Investigators say he was involved in a sprawling money-laundering scheme and may have received bribes related to the construction of a refinery that has ballooned in cost to $18.5 billion from $2.5 billion.

The list goes on. Petrobras faces scrutiny over claims that its employees received $139 million in bribes from SBM Offshore, a Dutch supplier of oil rigs. Petrobras said this month that an internal audit had not found evidence of the bribes, but federal investigators are still examining the matter. Another investigation is looking into claims of gross overbilling in an $825 million contract with Odebrecht, the Brazilian construction and oil services giant.

Despite the scandals, Petrobras remains Brazil’s most powerful company. Even as the company aims to invest about $220 billion over the next five years, Mr. Volpon points out that most other companies in Brazil are not following suit. On the global stage, he says, Brazilian companies, hobbled by high interest rates, inflation and an expensive currency, are becoming less competitive.

Meanwhile, Petrobras, in the last five years, has sold $51 billion worth of bonds to yield-starved global investors, nearly a quarter of all corporate bonds emanating from Brazil and the most of any emerging-market company, according to data compiled by Thomson Reuters.

But the munificence of foreign investors is not bottomless. As interest rates in the United States creep up and as Brazil’s finances come under greater stress, Petrobras’s top creditors — which include mutual fund giants like Pimco, Fidelity and BlackRock — may well view their exposure as too risky and begin to unload their bonds.

“It’s just such a big issuer,” said Gary N. Kleiman, an emerging-market investment consultant who says that a Petrobras sell-off could ignite a broader emerging-market pullback. “We are just waiting for this thing to blow up.”

Citing the increasing debt load, Moody’s downgraded the company’s debt last October to Baa1, the third-lowest investment grade rating offered by the credit agency.

The effect on Petrobras’s financing ambitions has been minimal.

Nearly a year after setting an emerging-market record with an $11 billion bond sale, the company tapped the bond market last month for yet another monster offering. Petrobras raised $8.5 billion, the biggest corporate debt offering of the year, period.

Meanwhile, as corruption scandals ensnare Petrobras, the company is struggling to lift oil and gas production, which fell 2.2 percent in 2013 to an average of 2.55 million barrels a day. There are signs this year that Petrobras may finally be succeeding in reversing such declines; the company’s oil production in Brazil climbed 0.3 percent in February from the previous month.

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Perhaps Petrobras’s biggest challenge is that it is not just an energy company. It is also at the heart of a fierce debate here over the extent of the Brazilian government’s use of its wealth to achieve political and economic goals.

In an effort to keep inflation from accelerating during an election year, President Dilma Rousseff’s government has prevented Petrobras from raising fuel prices to meet the cost of importing refined gasoline and diesel. At the same time, domestic fuel consumption has surged since the Brazilian authorities offered incentives to car manufacturers to raise production.

The result is that Petrobras’s losses in its refining, transportation and marketing operations reached $8 billion in 2013.

Throughout the economy, examples abound of Petrobras being stretched thin by policies aimed at asserting greater state control over the oil industry, like measures requiring Petrobras to buy equipment domestically, effectively propping up inefficient industries in Brazil like shipbuilding.

Speaking at a Brazilian shipyard on Monday, Ms. Rousseff lashed out a critics of Petrobas and her government’s energy policies, describing the oil giant as Brazil’s “mother company.” Contending that any corruption at Petrobas would be rooted out by investigators, she accused political opponents of a “smear campaign” against the company.

Still, as these so-called local content rules make Petrobras’s costs skyrocket — and increase the company’s debt — energy analysts here are also growing dismayed over the crisis in Brazil’s once-envied ethanol industry, which has been shuttering dozens of plants as producers fail to compete in price with Petrobras’s subsidized gasoline.

Facing budgetary pressures, the authorities have also quietly stopped strengthening Brazil’s sovereign wealth fund. Created in 2008 soon after Petrobras announced its major oil discoveries, the fund was viewed as a pillar of efforts to establish greater financial stability in Brazil, as commodities exporters like Norway, Chile and Canada have done.

But in an attempt to meet a budget target for the 2012 fiscal year, officials withdrew about 80 percent of the money in the fund, leaving it with just $1.3 billion. Instead of replenishing the fund with proceeds from oil exports, Petrobras has grown more dependent on importing fuel and building costly projects, forcing its debt up.

Petrobras remains far from approaching the levels of political tension and opaque dealings that now characterize Petróleos de Venezuela, the acutely politicized oil producer owned by Venezuela’s government that was once considered an industry leader and a bastion of technical expertise.

But some contend that Petrobas is also being stretched by Brasília’s political ambitions. “Petrobras’s woes are the result of well-defined government policies,” said John Forman, a former head of the regulatory agency overseeing Brazil’s oil industry. “That’s where things get complicated, because changing the policies is challenging indeed.”

Simon Romero reported from Rio de Janeiro, and Landon Thomas Jr. from New York.