Petrobras scandal: Brazil oil giant turns to US SEC for help on corruption costs

After months of debate over how to book corruption costs, Brazilian oil giant Petrobras is turning to US agencies to get advice on how to deal with the company's write-downs, following revelations that the company lost up to $33bn (£21.6bn, €28.9bn) in 2014, due to corruption and financial inefficiency.

The beleaguered company is battling to report audited results before triggering an acceleration of debt payments at the end of May 2015.

Petrobras is seeking advice from the US Securities and Exchange Commission (SEC) on methodologies for recognizing graft losses, one of the company representatives said.

It plans to send a team of executives, accompanied by representatives of auditor PricewaterhouseCoopers.

Corruption costs are linked to the Brazil state-controlled oil producer's alleged scheme in which contractors colluded to inflate bids – with Petrobras executives allegedly taking bribes and politicians sharing in the proceeds.

The giant's new management wants to reach an agreement with SEC regulators in the US and Brazil on the best methodology to calculate such impairments, reported this afternoon, 13 February, 2014.

A troubled company

It was revealed today (13 February) that Petrobras has lost more than $1.1bn worth of contracts after the third largest offshore driller in the world, Seadrill, cut orders from its backlog because of the ongoing corruption scandal engulfing the firm.

This comes as Maria das Graças Foster, the CEO of Petroleo Brasileiro (Petrobras) and five members of the state-run oil giant's board of directors, were forced to resign on 4 February, following the scandal.

Petrobras said it will publish its much-delayed audited results for 2014 by the end of May 2015, to fend off possible loan defaults.

Prior to that, the company's CEO, Aldemir Bendine said he aimed to release audited fourth quarter results by the end of March, as the firm faces a gargantuan credit default if it fails to report in time.

Petrobras must provide its audited fourth-quarter results by the end of June 2015 or face defaulting on more than $50bn (£32.5bn) of bonds. The oil giant confirmed its timely intentions through a new securities filing on 12 February.

Earlier this week it was revealed that two thousand employees of Brazil's state-run oil giant are now under investigation.

An internal audit led by former Minister of the Federal Supreme Court, Ellen Gracie, seized the computers and mobile phones of more than 2,000 employees with access to information relating to the federal police's "Lava Jato Operation" (Portuguese for "Operation car wash").