05/01/2014
BRASILIA – The CEO of Brazilian state-controlled oil giant Petrobras insisted Wednesday that the company’s ultimately disastrous acquisition of a U.S. refinery in 2006 was just a “bad deal” and not an instance of corruption.
“Petrobras’ losses on the Pasadena (Texas) refinery can be totally or partially recouped,” Graça Foster told the financial oversight committee of Brazil’s Congress.
She quantified those losses in the range of $500 million, though government opponents say the true figure could be $1 billion.
The purchase was approved by Petrobras’ board, led at the time by Dilma Rousseff, now president of Brazil.
Rousseff, who is seeking a second term in this year’s elections, said last month that the board approved the deal based on a “legally flawed” report prepared by Petrobras’ then-international director.
Foster, a chemical engineer who joined Petrobras in 1978 and became CEO two years ago, sought on Wednesday to explain the rationale for the U.S. acquisition.
“It was important for Petrobras to have refinery capacity abroad for its heavy oil,” she told lawmakers, as heavier, high-sulfur crude then made up most of the company’s production.
Later, however, the international market for heavy crude turned soft and the weight of Petrobras’ output began to shift toward the massive deposits of lighter crude found off Brazil’s Atlantic coast, Foster said.
Petrobras paid $360 million for a 50 percent stake in the Texas refinery in 2006, a year after Belgium’s Astra Transcor Energy had acquired a full interest in the facility for $42.5 million.
Terms of the contract that were not brought to the board’s attention at the time the deal was under consideration forced Petrobras to shell out an additional $820 million for Astra’s remaining stake several years later.
Brazil’s Congress has named a special committee to scrutinize Petrobras’ transactions in recent years.
source
BRASILIA – The CEO of Brazilian state-controlled oil giant Petrobras insisted Wednesday that the company’s ultimately disastrous acquisition of a U.S. refinery in 2006 was just a “bad deal” and not an instance of corruption.“Petrobras’ losses on the Pasadena (Texas) refinery can be totally or partially recouped,” Graça Foster told the financial oversight committee of Brazil’s Congress.
She quantified those losses in the range of $500 million, though government opponents say the true figure could be $1 billion.
The purchase was approved by Petrobras’ board, led at the time by Dilma Rousseff, now president of Brazil.
Rousseff, who is seeking a second term in this year’s elections, said last month that the board approved the deal based on a “legally flawed” report prepared by Petrobras’ then-international director.
Foster, a chemical engineer who joined Petrobras in 1978 and became CEO two years ago, sought on Wednesday to explain the rationale for the U.S. acquisition.
“It was important for Petrobras to have refinery capacity abroad for its heavy oil,” she told lawmakers, as heavier, high-sulfur crude then made up most of the company’s production.
Later, however, the international market for heavy crude turned soft and the weight of Petrobras’ output began to shift toward the massive deposits of lighter crude found off Brazil’s Atlantic coast, Foster said.
Petrobras paid $360 million for a 50 percent stake in the Texas refinery in 2006, a year after Belgium’s Astra Transcor Energy had acquired a full interest in the facility for $42.5 million.
Terms of the contract that were not brought to the board’s attention at the time the deal was under consideration forced Petrobras to shell out an additional $820 million for Astra’s remaining stake several years later.
Brazil’s Congress has named a special committee to scrutinize Petrobras’ transactions in recent years.
source
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