Petrobras could relax local content rules amid graft probe

Wednesday, December 31, 2014

Brazil's state-run oil major Petrobras could relax restrictions on foreign firms in local supply contracts following a ban on companies linked to the Car Wash corruption probe.

The announcement comes after Petrobras blocked 23 developers from bidding in new tenders amid allegations of their involvement in the multibillion-dollar graft scheme.

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Banned firms include Brazilian construction giants Camargo Correa, Odebrecht, Andrade Gutierrez and Queiroz Galvão.

Petrobras currently demands that local firms execute at least 65% of goods and services contracts in the oil and gas industry.

But in a statement, the company said it could be forced "to find alternatives" to meet production targets.

"We will seek suppliers of goods and services to guarantee competitive procedures and the best conditions for the company. This could eventually involve foreign firms," Petrobras is quoted as saying by local news portal Valor Econômico.

Federal police have so far filed charges against 36 suspects as part of the Car Wash probe.

Authorities say the investigation aims to dismantle an alleged US$4.5bn money laundering ring involving Petrobras directors, construction firm executives and high-ranking politicians.

Civil and criminal cases have also been launched against Petrobras in the US.