Three billion dollars in settlements regarding an ongoing corruption scandal in Brazil need to be approved by the country's parliament, including a $50 million settlement with the ordeal's main auditor, PricewaterhouseCoopers' (PwC), according to a new report by Reuters.
PwC's Brazilian subsidiary disclosed the settlement in a Manhattan court on Thursday. The New-York based Pomerantz law firm and other lawyers affiliated with the case plan to seek $285 million in fees related to the case, filings show. U.S. district Judge Jed Rakoff must approve the fees and settlements, according to protocol.
Investors in Petrobras are due to receive $2.95 billion to settle a class action lawsuit targeting the state-run company for losses in share value after the corruption probe exposed the depths of official mismanagement.
If the $285 million deal is approved, it would the largest payout to U.S. investors from a foreign company in history, Reuters reports, though the total payout is smaller than analysts expected.
Petrobras is playing the victim card by denying wrongdoing and accusing former officials of preying on the companies' energy enterprises. Petrobras CEO Pedro Parente said it would not pay out foreign settlements unless forced to do so by law.
Petrobras is trying its hardest to attract foreign investment as the corruption scandal winds down. The company cut local content requirements for future oil E&P contracts in a bid to satisfy the demands of local suppliers and allow new customs breaks for oil majors active in the South American country. Tough local content requirements have stifled oil firms' investment interest in Brazil. They complain that complying to the rules made oil development in open blocks unprofitable.
In recent leasing rounds, Brazil has not had trouble attracting bids from oil majors for fossil fuel development. Brazil accepted bids for eight blocks in late October, six of which went to multinational oil majors, including Shell and ExxonMobil.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More