Petrobras Overpaid by $1.2 Billion, Tribunal Probe Shows

Petroleo Brasileiro SA allowed suppliers in refinery projects and oil platforms to over charge by about 3 billion reais ($1.2 billion), according to preliminary findings of a tribunal overseeing state spending.

The figure includes an estimated $792 million in over billing at the Pasadena refinery in the U.S. as well as surplus payments at the Comperj and Abreu e Lima plants being built in Brazil, Augusto Nardes, president of the TCU tribunal, told reporters in Brasilia today. The company’s press department didn’t respond to an e-mail seeking comment.

Petrobras, as the Rio de Janeiro-based producer is known, is being investigated in Brazil by a congressional committee, the federal police and the TCU after a former director was arrested earlier this year for his alleged involvement in a laundering operation. Former head of refining Paulo Roberto Costa has alleged that builders formed a cartel to overcharge for projects and divert money to politicians.

Nardes said he spoke with Ricardo Lewandowski, president of Brazil’s Supreme Court, two weeks ago about reviewing a 1998 executive decree that allows Petrobras to skip the normal licensing process for contracts. Willingness from President Dilma Rousseff to examine the issue could signal that Brazil supports greater transparency at the country’s largest state-run company, Nardes said.


“The Supreme Court should make a decision because this issue has been costly for Brazil,” Nardes said. “It facilitates, leaves room for graft and fraud, which is why it’s necessary for the Supreme Court to decide.”

Petrobras will pay $21.6 billion to complete the Comperj complex that’s scheduled to open in 2016, Jose Jorge, a member of the TCU tribunal, said in documents released last month. Management has been “reckless” in skipping technical analysis, overpaying for contracts and lacking effective controls, according to the audit.

Petrobras said in an April 16 statement that, just like Abreu e Lima, Comperj suffered a series of changes in its initial project. The cost in that statement was $13.5 billion.

Shares rose 0.1 percent to 14 reais in Sao Paulo and are down 18 percent so far this year.

Before it's here, it's on the Bloomberg Terminal.