San Francisco: A preliminary arbitration hearing has ordered Brazil’s beleaguered state-run oil firm Petrobras to pay an increased amount of royalties – amounting to hundreds of millions of dollars – to the nation’s government.
Petrobras on Monday announced the decision which was made by a panel of the International Court of Arbitration. The ruling means that Petrobras must cough up an extra 350 million reais ($112m) per quarter in royalties for oil produced in seven offshore fields.
The payments are a windfall-profits tax, effectively an additional royalty paid to the government on large and very productive fields beyond the standard 10 percent per barrel.
It is another financial setback for the company, which is reeling from a huge corruption scandal and the worldwide slump in oil prices.
The seven fields in question are collectively known as “Whale Park” and are located in the north end of the Campos Basin about 120 kilometers off Vitoria, the capital of Espirito Santo State.