KBR fights $200 mln Brazil award in New York court

Feb 16 (Reuters) - KBR Inc is fighting in New York federal court against a $200 million settlement of a five-year dispute over an oil project off Brazil, according to former parent Halliburton Co, which is liable for that money.

Halliburton disclosed in its annual report on Thursday that KBR, a U.S. engineering company, had filed a motion to vacate the arbitration award in the U.S. District Court for the Southern District of New York.

The award to Barracuda & Caratinga Leasing Co, controlled by Brazilian oil giant Petrobras, related to failed bolts on subsea flowlines that were part of a $2.5 billion oilfield project contract awarded to KBR.

After the settlement in September 2011, KBR said in a regulatory filing a month later that Halliburton may decide to challenge all or part of the award, in which case KBR would be responsible for the associated legal costs.

Under their 2007 separation, Halliburton had agreed to shoulder any Barracuda-Caratinga award against KBR, formerly known as Kellogg Brown & Root.

The Brazilians then filed a lawsuit in November to enforce the arbitration award. It is Barracuda & Caratinga Leasing Co v. Kellogg Brown & Root LLC, case no. 1:11-cv-07827-PGG.