Petrobras pay $2.95bn to settle US class action on corruption

Brazil's state-controlled oil company Petrobras denied any wrongdoing in the $2.95 billion deal. (Reuters)
Updated 03 January 2018
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Petrobras pay $2.95bn to settle US class action on corruption

LONDON: Petroleo Brasileiro has agreed to pay $2.95 billion to settle a US class action brought by investors who claim they lost money in a corruption scandal.
Brazil’s state-controlled oil company, Petrobras (as it is known) has claimed it was itself a victim, while expressly denying any wrongdoing under the terms of the deal. United States District Judge Jed Rakoff must approve the settlement.
But, the company’s market value has plunged as the so-called Lava Jato or “car wash” corruption scandal has deepened. The company said the settlement will be paid in three roughly equal installments and will affect fourth quarter results.
Investors sued Petrobras after prosecutors in Brazil accused former executives at the company of accepting more than $2 billion in bribes over the course of ten years, mainly from construction and engineering companies.
Petrobras said that it hoped the settlement would resolve all investor claims in the United States over the scandal.
The deal does not include investors who bought non-US-based Petrobras securities outside the United States, according to the company. The deal comes just days after Brazil’s securities regulator CVM formally accused eight former Petrobras executives of corruption.
According to a legal filing by the regulator on Friday, the accusations relate to possible irregularities in the contracting process for three drill ships.
Former Petrobras chief executives Maria das Gracas Foster and Jose Sergio Gabrielle are among the accused in CVM’s filing.
The largest securities fraud settlements in US history include $7.2 billion stemming from the collapse of Enron, $6.2 billion over an accounting scandal at WorldCom and $3.2 billion over an accounting scandal at Tyco International, according to Stanford Law School’s Securities Class Action Clearinghouse.


Oil theft ‘costing Libya over $750m annually’

Updated 19 April 2018
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Oil theft ‘costing Libya over $750m annually’

  • Libya’s oil sector collapsed in the wake of the 2011 NATO-backed uprising that toppled longtime dictator Muammar Qaddafi.
  • The recovery of oil production and exports is key to restoring Libya’s economy.

Tripoli: Fuel smuggling is costing Libya more than $750 million each year and harming its economy and society, the head of the National Oil Company in the conflict-riddled country said.
“The impact of fuel smuggling is destroying the fabric of the country,” NOC president Mustafa Sanalla said according to the text of a speech delivered on Wednesday at a conference on oil and fuel theft in Geneva.
“The fuel smugglers and thieves have permeated not only the militias which control much of Libya, but also the fuel distribution companies which are supposed to bring cheap fuel to Libyan citizens,” he said.
“The huge sums of money available from smuggling have corrupted large parts of Libyan society,” he added.
The backbone of the North African country’s economy, Libya’s oil sector collapsed in the wake of the 2011 NATO-backed uprising that toppled longtime dictator Muammar Qaddafi.
Before the revolt Libya, with estimated oil reserves of 48 billion barrels, used to produce 1.6 million barrels per day (bpd).
But output fell to less than 500,000 bpd between 2014 and 2016 due to violence around production facilities and export terminals as rival militias fought for control of Africa’s largest crude reserves.
No oil was exported from Libya’s main ports until September 2016 with the reopening of the Ras Lanuf terminal in the country’s so-called oil crescent.
The recovery of oil production and exports is key to restoring Libya’s moribund economy.
Sanalla urged Libya’s “friends, neighbors but above all the Libyan people themselves... to do everything they can... to eradicate the scourge of fuel theft and fuel smuggling.”