Petrobras CEO Seeks to Recoup $1.8 Billion From Graft Losses

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Petroleo Brasileiro SA is seeking to recover as much as 6.2 billion reais ($1.8 billion) lost as part of Brazil’s biggest corruption scandal.

“We have this expectation, and I think the federal prosecutor’s office shares this view, to recover that sum,” Petrobras Chief Executive Officer Aldemir Bendine said of graft-related write-offs during a press conference at company headquarters in Rio de Janeiro on Friday.

The world’s most indebted oil company announced today the recovery of 139 million reais from the scandal, in a ceremony with the country’s prosecutor general ahead of the year-and-a-half-long investigation. In 2014, Petrobras had its first operating loss since 1991 because of fuel sold below import costs and the write-offs.

Petrobras has recouped almost 300 million reais from illegal offshore accounts of former executives after they became the state’s witnesses and agreed to revert the proceeds of corruption. That’s just a fraction of the 6.2 billion reais the company wrote off for 2014.

Half of the amount returned to the company today came from bribes a former executive said he collected to favor Schiedam-based SBM in Petrobras bids, prosecutors said at the event.

More Blocks

SBM is one of 32 companies now blocked from signing new contracts with the state company as part of corruption investigations, compliance head Joao Elek told reporters. The list has increased in the past months from 24, he said.

Petrobras may increase the corruption losses in future quarter results beyond the 6.2 billion reais written down in April, depending on findings from the police investigations, Bendine said. The amounts, though, would fall under the 44.6 billion reais already written off as impairment in April, he said.

The oil company has been reducing investments, production targets and plans to sell $15 billion of assets in 2016 and 2017 to protect its cash position.

Bendine and prosecutor-general Rodrigo Janot said they see Petrobras as a victim of the scheme. Petrobras investors suing the company in the U.S. dispute this version, saying executives published misleading financial statements and overstated the quality of internal controls during a multiyear money-laundering and bribery operation.

Elek announced today three new internal control measures. Internal investigation and complaint bodies will be independent, punishment for employees involved in misconduct were reinforced and investment will no longer be an individual decision from a head division, as allowed before.