Top Brazil Court Clears Path for Congress Inquiry Into Petrobras

Brazil’s top court allowed opposition parties to begin a congressional inquiry into allegations of irregularities in an oil refinery purchase by state-run Petroleo Brasileiro SA.

Congress may convene an inquiry dealing exclusively with Petrobras, Justice Rosa Weber said in a ruling posted on the court’s website late last evening. The investigation doesn’t need to include allegations of irregularities involving parties of the two leading opposition candidates facing President Dilma Rousseff in Oct. 5 elections, she said.

The decision, which could be overturned by a majority of Supreme Court judges, paves the way for a prolonged political battle and media spotlight on the scandal involving Brazil’s top state-run company just before presidential polls. The opposition parties want to investigate Petrobras’s $370 million purchase of a 50 percent stake in Pasadena Refining System Inc. from Astra Oil Trading NV in 2006.

Rousseff, who was then the chairwoman of Petrobras, has said that directors approved the acquisition without knowledge of a put option that in 2012 forced the company to buy the rest as part of a $820.5 million legal settlement.

While surveys show Rousseff would have enough support for a first-round win, her approval ratings are dropping as growth slows and inflation quickens. The negative evaluation of her performance rose to 28 percent from 22 percent, according to a Vox Populi poll released April 17 in the online edition of Carta Capital magazine. Her positive evaluation was 32 percent, compared with 34 percent in February.

Support for opposition Senator Aecio Neves was 16 percent in the Vox Populi poll, compared with 17 percent in the previous poll. Former Pernambuco State Governor Eduardo Campos garnered 8 percent, compared with 6 percent.

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; Andrew Hobbs at ahobbs4@bloomberg.net Indranil Ghosh, Andrew Hobbs

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