May 15, 2018 / 12:39 PM / in 2 months

Petrobras to get 1-2 bln barrels of oil in Brazil settlement -report

SAO PAULO, May 15 (Reuters) - Brazil’s government is likely to grant Petroleo Brasileiro SA an additional 1 billion to 2 billions barrels of oil to settle a dispute with the state-controlled oil firm, newspaper Valor Economico reported on Tuesday.

Negotiations regarding reserves in the “transfer-of-rights” area that the government ceded in 2010 to Petrobras, as the company is known, are expected to conclude by May 17, Valor reported, without citing the source of the information.

Since 2014, both the government and the state-controlled company have claimed to be owed billions of dollars based on disputed readings of a complex contract concerning the area.

Once the disagreement is settled, Brazil’s government has said it aims to hold an oil and gas auction in the second half of this year for leftover areas in the coveted offshore region.

Petrobras said in a securities filing that no agreement has been reached yet. Brazil’s Finance Ministry did not immediately comment on the matter.

Petrobras Chief Executive Pedro Parente said last week talks with the government were making progress and they could reach a deal by May 17. (Reporting by Carolina Mandl Editing by Brad Haynes and Bernadette Baum)

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