January 8, 2019 / 11:14 AM / a month ago

Brazil's Petrobras may get $14 billion to settle dispute over some oil exploration areas

FILE PHOTO: A man walks in front of the Brazil's state-run Petrobras oil company headquarters in Rio de Janeiro, Brazil December 5, 2018. REUTERS/Sergio Moraes

SAO PAULO (Reuters) - Petroleo Brasileiro SA (Petrobras) may receive about $14 billion from the Brazilian government to settle a dispute relating to certain oil exploration areas, the state-run oil firm said in a securities filing on Tuesday.

The dispute centers around payments relating to operations in the so-called transfer-of-rights area off the coast of Brazil.

Such a settlement can only be confirmed after Brazil’s TCU audit court issues an opinion on the matter, Petrobras said, adding both parties have to agree on the terms.

“The draft [of the agreement] under analysis by the TCU contemplates one, among the various scenarios discussed between representatives of the government and Petrobras,” the company said in the filing. “This scenario, after the TCU’s opinion [is known] and [after] approval by the parties, may result in a credit in favor of Petrobras amounting to approximately $14 billion,” the filing said.

Common shares of Petrobras surged as much as 5.5 percent in afternoon trading on Monday after a local newspaper published details of the potential settlement, which the Economy Ministry subsequently denied.

Reporting by Ana Mano; editing by Jason Neely and Bernadette Baum

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