Ex-Petrobras Director's Testimony Fails to Clarify Pasadena Deal

04/17/2014 - 09h23

Nestor Cerveró, ex-director of Petrobras' international department, testified to Congress yesterday regarding the controversial purchase of the Pasadena oil refinery in the United States.

Cerveró's version of events differed from the government's in several key aspects, but it still frustrated the opposition, who were hoping for something more incriminating.

In a testimony that lasted for more than five hours, Cerveró argued that the clauses omitted in the summary that underpinned the deal were not significant. This directly contradicted President Dilma Rousseff's version of events.

Dilma, President of the Petrobras Board of Directors at the time, said last month that the deal only went ahead because it had been based on advice which was 'technically flawed', provided by the department of which Cerveró was in charge.

Cerveró's testimony reinforced the scale of the damage to Petrobras. It is estimated the company is around $350 million worse off as a result of the purchase.

Nonetheless, the governing Workers' Party (PT) believe that Cerveró's appearance has allayed calls for a formal congressional investigation (CPI) into irregularities at Petrobras.

The controversy around Pasadena is based around the "Put Option" clause, which obliged Petrobras to buy half the refinery following disagreement with its partner, and the "Marlim" clause, which guaranteed the other partner a minimum of 6.9% profit per year. The information regarding these clauses did not appear in the summary provided by Cerveró's department.

"There was no intention to deceive anyone. [] These clauses aren't representative of the deal," he said. He added that the "Put Option" clause is "very common practice," present in "hundreds" of Petrobras contracts.

For Cerveró, the "Marlim" clause was "negotiated insurance" with the partner, which allowed the use of 70% of the refinery to process heavy oil, which is less profitable.

However, advisors to the President and technicians at Petrobras consider the figure of a guaranteed 6.9% to be very high, constituting a possible risk to the company.

Cerveró also denied that he had been demoted, having been dismissed from his post as the international director of Petrobras and transferred to the financial department of BR Distribuidora. Petrobras' president, Graça Foster, confirmed on Tuesday that this did indeed constitute a demotion, when she spoke to the Senate.

Cerveró argued that Foster's assessment that the Pasadena deal had not been good business was "unfair." "It wasn't the best project in the world, but to say that it was a doomed enterprise" he complained.

He defended the deal by saying it was part of Petrobras' plans to increase its business outside Brazil, though he recognized that the subsequent discovery of pre-salt layer oil reserves has changed company priorities, rendering Pasadena irrelevant.

Cerveró also denied the assertion of his own lawyer, that the Petrobras board had received the documents regarding the contract 15 days before the purchase. Cerveró said his lawyer had "been hasty."

Translated by TOM GATEHOUSE

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Alan Marques/ Folhapress

Nestor Cerveró testified to Congress regarding the controversial purchase of the Pasadena oil refinery