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Petrobras HQ raided by Brazil police in money-laundering probe

[April 12, 2014]  By Rodrigo Viga Gaier

RIO DE JANEIRO (Reuters) — Brazil's Federal Police raided the headquarters of state-run oil company Petroleo Brasileiro SA in Rio de Janeiro on Friday as part of a money-laundering probe, two sources with direct knowledge of the operation told Reuters.

In a statement Friday, the police said they were exercising 23 search and arrest warrants in the cities of Sao Paulo, Campinas, Rio de Janeiro, Macae and Niteroi as part of its "Operação Lava Jato," which is an investigation of money laundering by currency exchange houses.

Petrobras, as the oil company is known, said in a note that Federal Police agents were received by Chief Executive Officer Maria das Graças Foster and that the officers ordered the company to provide documentation relating to "a specific contract." Petrobras did not confirm the motive for the search. Police did not confirm that Petrobras was one of the locations that were raided.

Operação Lava Jato, which is Portuguese for "Operation Car Wash," has already resulted in the arrest of at least one former executive at Petrobras.

The raid on Petrobras comes amid a series of scandals that has raised questions about the company's notoriously high costs, management difficulties and production delays. These problems have helped transform Petrobras from one of the world's most sought-after investments into the world's most indebted and least profitable major oil company.

In 2008, following the discovery of giant offshore oil and gas resources, Petrobras' market value was nearly $300 billion, making it one of the world's six biggest companies. It is now worth less than $90 billion.

Paulo Roberto Costa, the former head of the company's refining and supply unit, was taken into custody on March 20 as part of the probe and is being held at a Federal Police jail in Curitiba in Brazil's southern state of Parana.

Congress has agreed to open an investigation into Petrobras' $1.2 billion purchase of a Texas refinery, which was started in 2006 and completed in 2012. Also, police and prosecutors in Europe, the United States and Brazil are looking into allegations that Dutch oil-ship leaser SBM Offshore SA bribed company officials to win oil vessel contracts.

Petrobras said an internal investigation of the SBM allegations found no sign of wrongdoing. It declined to comment on the Texas refinery investigation pending the completion of its own internal probe.

Petrobras preferred shares, the company's most-traded class of stock, were up 3 percent at 16.15 reais in afternoon trading in Sao Paulo on Friday.

(Reporting by Rodrigo Viga Gaier and Jeb Blount; writing by Jeb Blount; editing by Bernadette Baum; and Peter Galloway)

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