Rousseff Faces Congressional Inquiry on Petrobras Deal

Brazil’s opposition lawmakers plan to start an inquiry into allegations of irregularities in an oil refinery purchase by state-run Petroleo Brasileiro SA. (PBR)

President Dilma Rousseff said yesterday that the Petrobras board that she headed in 2006 approved the $370 million purchase of a 50 percent stake in Pasadena Refining System Inc. from Astra Oil Trading NV without knowledge of a put option that in 2012 forced the company to buy the remaining stake as part of a $820.5 million legal settlement.

“It’s an unforgivable mistake for the president to make a decision that cost taxpayers more than $1 billion,” said Antonio Imbassahy, leader of the opposition PSDB party in the lower house. “We already have the necessary votes to install a congressional inquiry.”

Rousseff already is dealing with a series of setbacks in Congress ahead of Oct. 5 presidential elections. Last week, half of the legislators in the PMDB party, the largest in the governing coalition, said their relationship with Rousseff’s Workers’ Party was in crisis and needed to be reevaluated. The presidential press office referred to yesterday’s comments when asked about congressional inquiries.

Federal police today detained Paulo Roberto Costa, Petrobras’s former head of refining, as part of investigations into an alleged money-laundering scheme, a police department press officer said from Brasilia, confirming a report today by Veja. The detention isn’t related to the Pasadena investigation, according to a statement on the police website.

Calls to Costa’s mobile telephone went unanswered.

Shares Rally

Petrobras shares rose 4.4 percent to 13.93 reais at 2:35 p.m. in Sao Paulo amid speculation Rousseff lost support in the presidential race in an Ibope opinion poll yet to be published.

Petrobras Chief Executive Officer Maria das Gracas Foster said in May 2013 that the company didn’t plan to sell the Pasadena refinery in Texas as it wasn’t satisfied with the proposals it received for the asset. In February last year, Foster said Petrobras had created a task force to try to boost the refinery’s profitability and value.

Legislators have already invited Foster to testify in the lower house, said Jose Mendonca Filho, head of the opposition DEM party in the lower house.

Party leaders can now choose to install a new congressional inquiry or expand the scope of an existing commission investigating separate allegations of Petrobras contract irregularities with SBM Offshore NV (SBMO), said Imbassahy. Petrobras said Feb.18 it’s investigating those allegations.

A press official for the Rio de Janeiro-based oil producer, who can’t be named under corporate policy, declined to comment on the Pasadena investigation or accusations.

Astra is a unit of Belgium’s Cie. Nationale a Portefeuille SA. Pasadena Refining was previously part of Baltimore-based Crown Central Petroleum Corp.

To contact the reporter on this story: Raymond Colitt in Brasilia Newsroom at rcolitt@bloomberg.net

To contact the editors responsible for this story: Andre Soliani at asoliani@bloomberg.net James Attwood

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