Deal in the offing for companies caught up in Petrobras affair

Deal in the offing for companies caught up in Petrobras affair

Companies implicated in the Petrobras scandal that has roiled Brazil for a year could soon be able again to do business with the state-run oil giant if a government-proposal of fines and payments is approved, according to reports by Reuters and Brazilian news outlet Folha.

Most of the firms caught in the web of the widespread bribes-for-rigged-contracts affair were engineering or construction businesses vying for lucrative contracts.

Since the breadth of the anti-corruption “Car Wash” probe has revealed staggering levels of graft (up to $2bn by Petrobras’ own accounting estimates) involving corporate executives and politicians, it has been hard for any of the companies allegedly involved to get loans and conduct business.

That logjam has hampered chances of an economic upturn in Brazil, which has been hit by the drop in oil prices among other factors.

Government sources told the news agencies that under the proposed deal around 20 implicated firms could pay about $4.2bn in fines and compensation.

In another story, Puerto Rico’s power company the Electric Power Authority (EPA), is replacing Petrobras as its main fuel supplier and signing a contract instead with Freepoint Commodities of Connecticut in the US.

Like much of the struggling Puerto Rican economy, EPA has heavy debts and says it can save $25m in the first year by this switch.

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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