Brazilian prosecutors have rejected the leniency agreement reached between SBM Offshore and Brazilian authorities in mid-July that could lead to a loss of US$12.7 billion.
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Image from SBM Offshore. |
Both SBM Offshore and Petrobras confirmed that the Fifth Chamber of the Brazilian Federal Prosecutor Service did not approve the leniency agreement signed by the Ministry of Transparency, Oversight and Control (MTFC), the Public Prosecutor’s Office (Ministério Público Federal - MPF), the General Counsel for the Republic (Advocacia Geral da União – AGU), SBM, and Petrobras on 15 July 2016.
“The non-approval of the agreement by the MPF makes it impossible for the Dutch company to reimburse $328.2 million to Petrobras, but does not necessarily imply the termination of the existing agreements between SBM and Petrobras,” Petrobras said. “The information regarding an eventual loss totaling $12.66 billion represents an estimate in the event of termination of all existing agreements between Petrobras and SBM in the period between 2016 and 2020, without any replacement alternative.”
SBM said it is seeking clarification on the decision.
On 15 July, SBM and Petrobras announced that its business relationship was moving forward following a $163 million settlement agreement over allegations relating to the Lava Jato scandal was reached.
SBM had agreed to pay a $162.8 million cash payment in three installments, of which $149.2 million would go to Petrobras; $6.8 million to the MPF; and $6.8 million to the Council of Control of Financial Activities (Conselho de Controle de Atividades Financeiras – COAF) for the implementation of units for massive electronic process of information and other instruments to be used in the prevention and combat against corruption by the MPF and the COAF.
The MTFC investigation had been suspended as a result of the execution of a memorandum of understanding between the MTFC and SBM Offshore in March 2015. Following the execution of the MoU, SBM Offshore, the MTFC, the MPF, the AGU and Petrobras engaged in negotiations which resulted in the signature on 15 July of the settlement agreement.
The terms of the deal also resulted in a reduction of 95% in future performance bonus payments related to FPSOs Cidade de Anchieta and Capixaba lease and operate contracts, representing a nominal value of approximately $179 million over the period 2016 to 2030, or a present value for SBM Offshore of approximately $112 million.
Read more:
SBM in Brazilian leniency deal
SBM Offshore agrees settlement - but not guilt
Petrobras starts up Cidade de Saquarema
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