BRASILIA May 14 Brazil's Senate opened an
inquiry on Wednesday into alleged corruption and mismanagement
at state-run oil company Petroleo Brasileiro SA, a
probe that could complicate President Dilma Rousseff's bid for
reelection in October.
A panel of senators will look into the costly purchase of a
refinery in Pasadena, Texas, for which critics say Petrobras
paid 20 times the market value.
The senators will also probe allegations that Petrobras
officials took bribes in exchange for steering contracts to SBM
Offshore NV, a Dutch oil-production ship leasing
company, as well as investigating alleged overpricing in the
building of refineries in Brazil.
The hearings will fan unwelcome controversy for Rousseff,
who was chairwoman of the Petrobras board when the Pasadena
refinery deal was signed in 2006. Her energy policies since
taking office, including controls on gasoline prices in Brazil,
have also eroded the company's profitability.
Fallout from the Petrobras scandal has helped bring down
Rousseff's approval ratings as she gears up to seek a second
term in a tighter-than-expected presidential race.
Opposition senators, however, boycotted the Senate inquiry
because they are holding out for a joint-chamber congressional
probe that would be harder for the government to control. The
lower house of Congress could vote on Thursday for a bicameral
inquiry, which in practice would supersede the Senate inquiry.
Rousseff said in March that the board she headed approved
the $370 million purchase of a 50 percent stake in Pasadena
Refining System Inc from Belgium's Astra Oil Trading NV. She
said she was unaware of a put option that forced Petrobras to
buy the remaining stake as part of a $820.5 million legal
The current chairman of the board, Finance Minister Guido
Mantega, told a congressional hearing on Wednesday that he
opposed the purchase of the remaining 50 percent of the refinery
but the case went to arbitration and Petrobras lost.
The Petrobras scandal has provided opponents with ammunition
to shoot down Rousseff's reputation as a good manager with no
tolerance for corruption. The allegations have added to the
criticism of the performance of Petrobras since Rousseff took
office in 2010.
Petrobras has the highest debt levels and lowest
profitability of any major oil company. Its market value has
shrunk to about $100 billion from $226 billion in 2010 as the
company failed to deliver on ambitious offshore expansion plans.
Profit fell 30 percent in the first quarter as refining and
fuel losses rose as oil output fell.
Critics say the government, by controlling domestic fuel
prices to keep inflation in check, is starving Petrobras of the
cash it needs to finance its $221 billion five-year expansion
Unable to meet demand for gasoline and diesel from its
Brazilian refineries, it has had to import. The fuel-price
policy forces it to sell the imports at a loss.
(Reporting by Anthony Boadle; Editing by Peter Galloway)