UPDATE 1-Brazil bars Skanska unit from public tenders in Petrobras probe

(Adds Skanska comment, details of accusation, context)

BRASILIA, June 9 (Reuters) - Brazil has banned the local unit of Swedish construction company Skanska AB from doing government work for at least two years, having accused it of involvement in a bribery and kickback scandal, the Ministry of Transparency said on Thursday.

The ministry said Skanska Brasil Ltda belonged to a cartel that fixed prices on contracts with Petroleo Brasileiro SA . It also said the company paid 3 million reais ($890,000) in bribes to obtain a 1.3-billion-real ($386 million) contract for the expansion of an oil terminal for the state-run company.

Skanska Brasil has denied being part of the cartel of 20 engineering and construction companies under investigation in the massive corruption scheme that has landed executives in jail and put dozens of politicians under investigation for allegedly receiving bribes and kickbacks.

Skanska said it had pulled out of Brazil, indicating the ban will not impact its business.

“Skanska AB made a decision to leave Latin America in 2014 and has since completed its remaining projects and sold all related operations in Brazil,” spokesman Edvard Lind said in Stockholm.

He said Skanska left Latin America because the business there was not profitable and “there is a lack of transparency in the region.”

Skanska is the second engineering and construction company to be penalized as a result of the corruption probe at Petrobras, as the state-controlled oil company is commonly known. Brazilian builder Mendes Junior Engenharia was barred from bidding for government contracts in April.

Skanska Brasil can lift the ban on public tenders by returning money lost to the state, the ministry said in a statement.

It said Skanska Brasil had paid bribes through false receipts issued by a front company called Energex, which had no registered employees and operated from a house in the interior of Sao Paulo state where 14 other companies were based.

The ministry, Brazil’s main anti-corruption body, had been called the Comptroller General’s office but was renamed by Brazil’s new government when interim President Michel Temer took office one month ago.

Temer’s promise to crack down on corruption in Brazil has been clouded by allegations that senior members of his ruling PMDB party have sought to obstruct the sprawling Petrobras investigation called “Operation Car Wash.”

Two ministers quit in Temer’s first weeks in office, including his first pick for minister of transparency.

($1 = 3.37 Brazilian reais)

Additional reporting by Jeb Blount in Rio de Janeiro; Editing by Lisa Von Ahn