Brazil oil sector recovery to take 'two or three years'

Brazil's battered oil industry will require at least "two or three" years to recover from the country's biggest ever corruption scandal, a consultant told BNamericas in an interview.

And the ongoing Lava Jato money laundering probe has only "scratched the surface" of deeply rooted graft within Brazilian public entities and institutions, according to oil sector specialist Arthur Pimentel.

"We've only seen the tip of the iceberg," said Pimentel, a director at Rio de Janeiro-based consultancy firm A&P.

"The federal police's [Lava Jato] investigation has only scratched the surface. The more the investigators dig, the more they will find. There are many skeletons in the closet involving other companies and public entities that we'll hear about in the coming months."

The two-year probe has led to jail terms for several former executives of state-run oil giant Petrobras and prompted major ratings agencies to downgrade the company to junk status.

The scandal has also been blamed for tipping Brazil into its worst recession in decades and fuelling a fresh wave of anti-government sentiment.

Petrobras is due to announce its full-year 2015 earnings on Monday and Pimentel expects little improvement on 2014, when the company reported a record US$16.8bn loss.

"The numbers we have been seeing don't give us great hope," he said. "The situation is bleak. There's great uncertainty about Petrobras' ability to carry out its future investment plans, due not only to the company's own financial problems but also the situation the country finds itself in.

"There are concerns about inconsistencies within government policies, appointments of ministers, the legal framework, the falling value of the real... I don't see the panorama improving for at least another two or three years."