Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR) has announced on Tuesday that it is attempting to null through a court in Brazil a construction contract involving a fuel distribution facility due to alleged graft issues.
Legal Action
The company has filed a legal action against Taranto Fundo de Investimentos and WTorre Engenharia e Construcao SA after internal investigations suggest certain irregularities in the bidding waiver procedure for the project.
Preliminary hearing for the lawsuit is expected to begin early next month.
Corporate Bylaws Amendments
Last week, Petroleo Brasileiro had its Shareholders’ Extraordinary General Meeting, during when the amendments in the management and governance bylaws were approved.
Under the amended bylaws, the company mandates to assign a new Strategy, Organization, and Management System Officer, bringing the total number of Executive Board members to eight. As of July 1, Nelson Luiz Costa Silva has been designated as the temporary Petroleo Brasileiro Strategy, Organization, and Management System Officer. until the Board of Directors decides on whom to elect for the said position.
Meanwhile, the total compensation for each executive officer, which was approved in April at the General Meeting, remains the same.
Exploration Block BM-S-8 Sale
Last month, Petroleo Brasileiro also revealed that the Board of Directors had approved the sale to Statoil Brasil Oleo e Gas Ltda of the stake in exploration block BM-S-8, resulting from a recent bidding procedure.
This transaction is just part of a budding long-term partnership between Petroleo Brasileiro and Statoil Brasil Oleo e Gas. The companies are presently in talks regarding other potential strategic collaborations in the future.
Accordingly, the companies have agreed on a base price of $2.50 billion for the transaction. Once the deal has been fulfilled, Petroleo Brasileiro will receive 50% of the said amount as an initial installment. The remaining 50% of the agreed base price will be settled on installment basis depending on subsequent milestones.
Currently, Petroleo Brasileiro is the major stakeholder of exploration block BM-S-8, owning 66% of it. Petrogal Brasil SA owns 14%; and Queiroz Galvao Exploracao e Producao SA and Barra Energia do Brasil Petroleo e Gas Ltda each owns 10%, respectively.
