Brazilian Judge Halts Petrobras’ Gaspetro Sale to Japan’s Mitsui

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – A Brazilian federal judge has suspended the sale of 49 percent of Petrobras’ subsidiary, Gaspetro, to Japan’s Mitsui Brazilian subsidiary for R$1.93 billion (US$700 million). According to the law official, the operation closed at the end of December 2015 was not fully explained and transparent and may bring losses to the Brazilian oil company and public finances.

“If the commercial operation is not immediately suspended there is the serious risk of not being able to recover the losses incurred from it, such as occurred with Pasadena (plant),” stated the document issued by Federal Judge João Paulo Pirôpo de Abreu in Bahia state.

According to Abreu the information on the sale does not possess relevant facts such as the reason for no public bidding on Gaspetro, the criteria used by Petrobras to determine the value of the sale and the choice of Mitsui and not another sector company.

In August of 2015 Shinji Tsuchiya, president of Mitsui Brasil, appeared before a Congressional Committee investigating Petrobras after the Japanese company was cited as having paid bribes to obtain contract benefits from the Brazilian oil giant.

Judge Abreu stated in his ruling that the Gaspetro deal could be a repetition of what happened with the transaction at the Pasadena, U.S. refinery where there was ‘dilapidation of public wealth and devaluation of a Brazilian company in the global market’.

In the Pasadena purchase, investigators claim that the Brazilian government paid US$1.1 billion for the plant in the United States, even though the market value of it was apparently around US$42 million.

Agencia Brasil reports that Petrobras issued a statement that it had no knowledge of the suspension and defended the commercial operation stating that the sale was ‘conducted legally and approved without restrictions by Cade (Brazil’s anti-trust agency)’.

According to Petrobras the sale of forty nine percent of its gas subsidiary is part of the divestment program put forth by the oil giant in its 2015-2019 Business and Administration Plan.