Amid Investigations, Petrobras Wants to Create Anti-Corruption Board

11/18/2014 - 10h35

Petrobras intends to create a board of governance to "comply with internal and external laws and regulations".

The goal is to avoid overcharging and misappropriation of money, as reported by former director Paulo Roberto Costa during the "Car Wash" operation.

According to Petrobras president Graça Foster, the proposal was presented to the Board of Directors last Friday (14).

They have approved it and will deepen the idea.

Graça said the new board could "perhaps be the most important action" to prevent irregular practices in the company.

The state-run oil company already has one Controlling Management, which plays a similar role to the new board, the eighth at Petrobras.

In 2006, Brazil Telecom created the first Board of Directors and corporate governance compliance in the country, after facing falling share prices.

Until then, the controlling of internal practices occurred only in managerial level.

By adopting procedures already used by American companies, the BrT showed the market it would follow the best market practices.

Petrobras intend to do the same by announcing the new board.

After the outbreak of the "Car Wash" operation - that investigates a corruption scheme at Petrobras–, the State decided to spend R$ 19 million (US$ 7.3 million) hiring two offices to investigate the misuse of funds in the works done by the building contractors investigated.

Brazilian Office TRW was hired for R$ 6 million (US$ 2.3 million), and American Gibson Dunn for US$ 5 million (approximately R$ 13 million at last Friday's [14] exchange rate).

They are expected to investigate the overcharging in Petrobras' contracts.

According to Graça, the company's legal department is developing measures to retrieve the resources misappropriated by the corruption scheme.

Petrobras director of Exploration and Production José Miranda Formigli says the company does not intend to cancel contracts for now. He affirmed the current stage of the investigation does not require Petrobras to break agreements.

So far, the company has only suspended contracts with the Dutch company SBM Offshore, which confessed to the prosecution of its country to have paid bribes to Petrobras officials to secure charter deals.

For the first time since the "Car Wash" operation has begun, Graça admitted she had heard since mid-year about the bribery paid to "a Petrobras employee or former employee".

PRODUCTION

Last Monday (17), José Miranda Formigli, director of Exploration and Production, informed that Petrobras reduced the increase in production forecast for 2014 to an average of 5.5% to 6%.

Previously, they expected an annual growth of production by 7.5%, with a 1 per cent margin of error.

Within the first nine months of 2014 Petrobras produced on average 1,995 barrels of oil and natural gas per day.

This year's third quarter average was 2,090 barrels per day. The company's production has increased 6% over the second quarter and 8.6% compared to 2013's third quarter.

Translated by JULIANA CALDERARI

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