Brazil investigating Petrobras Argentina sale

A Brazilian federal court will investigate the 2016 sale of Petrobras’ Argentinian unit, a lawyer representing several NOC shareholders said Wednesday.

The deal drew controversy in Brazil due to the low price the company received for its shares compared to the USD 3 billion that the NOC had originally paid for the local unit in 2002.

Petrobras sold its 67.1933%% stake in the Argentinian subsidiary to Pampa Energía in May 2016 for USD 892 million. Among the assets covered in the sale were several E&P licences, a stake in Argentina’s Transportadora de Gas del Sur pipeline system, a petrochemicals plant, power generation facilities, a refinery and nearly 270 petrol stations.

Pampa Energia maintains that the agreement was reached through a transparent and competitive bidding process. The company’s executive vice-president, Diego Salaverri, cites low oil prices and an uncertain business climate in Argentina as factors resulting in the low price that Petrobras received.

Still, the recent jailing of Aldemir Bendine, Petrobras CEO at the time of the sale, has cast further suspicion on the deal. Bendine has been implicated in the wide-ranging Operation Car Wash bribery scandal that has swept across Brazil, prompting officials and shareholders alike to question the motives behind the sale of Petrobras Argentina.

At the time of the deal, Petrobras had said that the sale would provide capital needed to reduce its debts, as it was experiencing major financial hardships. This was echoed in the testimony of Petrobras legal manager Claudia Zacour before a court committee on Wednesday.