Sponsored by: Investment Center

Something new in your business?  Click here to submit your business press release

Chamber Corner | Main Street News | Job Hunt | Classifieds | Calendar | Illinois Lottery 

Brazil´s president also responsible for refinery deal: ex CEO

Send a link to a friend  Share

[April 21, 2014]  BRASILIA (Reuters) — Brazil´s President Dilma Rousseff must assume her share of responsibility for the controversial purchase of a refinery in Texas by Petroleo Brasileiro SA, the former chief executive of the state-run oil company said in an interview published on Sunday.

Rousseff chaired the board of Petrobras in 2006 when it approved the purchase of Pasadena Refining System Inc, near Houston.

Its high cost and losses later incurred at the refinery have put Petrobras at the center of a growing political scandal that began with bribery accusations and was fanned by the arrest of a former director in connection with a money-laundering case.

The fall-out could complicate a re-election bid in October by Rousseff, who has said she was not informed of two clauses in the refinery contract that made it an onerous deal for Petrobras.

Petrobras chief executive at the time, José Sergio Gabrielli, told the Estado de S. Paulo newspaper that both he and Rousseff were responsible for the purchase that turned sour.

"I was president of the company. I cannot escape my responsibility, and likewise President Dilma cannot escape her responsibility as chairwoman of the board," he said.

Gabrielli echoed statements made by his successor at the helm of Petrobras, Maria das Graças Foster, who told a Senate hearing on Tuesday that the purchase was a good deal at the time but world economic downturn turned it into a money loser.

"I still think that it was a good deal in 2006, a bad deal for the market conditions in 2008-2011 and it became a good business once again in 20113-2014," Gabrielli said, referring to the refinery operation that turned its first profit for Petrobras in the first two months of this year.

[to top of second column]

Petrobras bought 50 percent of the 100,000-barrel-per-day (bpd) refinery for $360 million in 2006 from Belgium's Astra Oil in hopes of maximizing returns on Brazilian heavy oil shipped to the United States.

Gabrielli said the Petrobras board would still have gone ahead with the refinery deal even if it had been informed about the two clauses Rousseff said she had no knowledge of: a Marlin clause that compensated Astra for possible losses, and a put option that in 2012 forced Petrobras to buy the remaining stake as part of a $820.5 million legal settlement.

(Reporting by Anthony Boadle; editing by Bernard Orr)

[© 2014 Thomson Reuters. All rights reserved.]

Copyright 2014 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


< Recent articles

Back to top