Cost of Petrobras corruption scandal could be $3bn more than estimated

Cost of Petrobras corruption scandal could be $3bn more than estimated

Petrobras’ estimation of the financial losses it suffered because of corruption could be only 40% of the real damage, said a Brazilian federal prosecutor on Friday.

In April when it released overdue accounts Petrobras put a figure of $2.1 billion as the cost to its bottom line from the huge web of bribes-for-contracts that has thrown the firm and the nation into turmoil for a year.

But prosecutor Deltan Dallagnol – part of a task force trying to unravel the corruption – put a much higher potential price of $5.3 billion on the effects of the graft network, which has hammered the state oil firm’s reputation and operating ability.

Saddled with the biggest debt of any oil company in the world, Petrobras has been scaling back investment and minimizing budgets.

The bribes for contracts scheme involved construction and engineering firms bribing their way into over-inflated contracts which represented terrible value for Petrobras.

Corporate executives and politicians lined their pockets and the scandal reached high into boardrooms and the governing Workers Party.

Donal Scully

With 28 years experience writing and editing for newspapers in the UK and Hong Kong, Donal is now based in California from where he covers the Americas for Splash as well as ensuring the site is loaded through the Western Hemisphere timezone.

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