Petrobras CEO: U.S. Refinery Purchase "Not a Good Deal"

04/16/2014 - 08h48

In a six-hour testimony yesterday at the Senate, Petrobras CEO, Graça Foster, admitted that the purchase of the Pasadena refinery (from the United States), in 2006, "was not a good deal," but she endorsed President Dilma Rousseff's version by stating that the summary in which the acquisition was based was incomplete.

"There is no transaction 100% safe in any commercial activity and certainly not in the oil and gas industry", she said .

According to opposition legislators and from the government itself, these excuses did not have the effect desired by the Presidential Palace which was stop the pressure for a Petrobras investigation in Congress.

Opposition senators requested again an investigation during and after Foster's testimony while members of the government acknowledged, behing the scenesm that Foster was only able to strengthen President Dilma's position, who endorsed the business in 2006.

At the time, Dilma chaired the company's board and supported the purchase. In March, however, she said she based her choice on a legal and technically "flawed" opinion.

As with the president, Foster criticized the former director of international operations Nestor Cerveró, responsible for the executive summary" without mentioning two quite important contract terms".

"When we made a presentation to the board and dealt with the executive summary, we expected to contain all necessary and sufficient information for a proper assessment of what it was meant to do. Besides, we expected to show the weak and fragile points," said Petrobras CEO.

According to Foster, the Pasadena refinery caused losses of US$530 million to the state company and only started to become profitable this year, accounting forn US$58 million in the first two months.

"It was not a good deal. This is unquestionable from an accounting perspective. It is a project with low probability for recovering the results," she said.

She, however, stressed that the information the board had at the time indicated the acquisition would be a good deal.

Grace also refuted the information that Astra Oil, the company from which Petrobras bought half of Pasadena's refinary, had acquired it earlier for US$42 million. According to Foster, Astra Oil paid at least US$360 million, including US$112 in investments. Petrobras had already spent, at the end of the business, at least US$1.25 billion.

Foster's effort in answering the questions from 27 senators did not prevent the fall of 3.83% of the shares of the state company at the Stock Exchange.

The CEO of the state company also acknowledged that the arrest of the former director Paulo Roberto Costa caused "great embarrassment".

Costa is one of the targets of Operation Lava Jato, that is investigating a money laundering and transfer scheme from contractors and suppliers from Petrobras to political parties.

Translated by SIMONE PALMA

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Alan Marques/Folhapress

Petrobras CEO, Graça Foster, admitted that the purchase of the Pasadena refinery "was not a good deal"