Brazil’s Petrobras faces legal risks after halting asset sales -lawyers

RIO DE JANEIRO, March 3 (Reuters) – Petrobras (PETR4.SA) could experience lawsuits for breach of agreement soon after the business halted prepared asset sales at the ask for of Brazilian leftist President Luiz Inacio Lula da Silva’s federal government, expert lawyers reported on Friday.

Petroleo Brasileiro SA, as the state-controlled enterprise is formally recognized, was requested this 7 days to halt for 90 times divestitures worthy of extra than $2 billion, with the authorities saying it was reevaluating the country’s nationwide electrical power coverage.

Lula appointee Petrobras Main Govt Jean Paul Prates advised reporters on Thursday “every thing is halted for evaluation.” Petrobras has nevertheless to formally ensure its determination to the govt.

“There is no likelihood of suspending signed contracts. There is no stipulation for that,” Alexandre Calmon, guide lover of law agency Campos Mello Advogados’ electricity space, instructed Reuters.

“That would be a breach of agreement,” he said, including if “Petrobras fails to do anything that it is obligated to do, it can be held dependable.”

The attorney also defined that sale processes by now signed but not concluded are not under the regulate of the oil corporation. There are clauses in the agreement that need to be fulfilled by all get-togethers concerned, Calmon reported.

Petrobras declined to remark even more.

Giovani Loss, a companion specializing in oil and gas at legislation firm Mattos Filho, also flagged the “opportunity for lawsuits in opposition to Petrobras for deliberately canceling signed transactions.”

“Suspending the revenue for political explanations sales opportunities to a dialogue about breach of contract,” he added, but famous that he could not “don’t forget a related situation in Brazil.”

Offers however to be accomplished include things like the sale of 22 property to 3R Petroleum (RRRP3.SA) for $1.38 billion and the sale of the Norte Capixaba cluster to Seacrest for up to $544 million.

Brazil’s mining and electricity ministry and Seacrest – as properly as BW Energy (BWE.OL) and Grepar, which also have contracts to buy belongings from Petrobras – did not straight away answer to requests for remark. 3R Petroleum declined to remark.

The sale halt marks a big shift from the stance taken by previous President Jair Bolsonaro’s administration, which oversaw a selection of Petrobras assets profits, including oilfields and refineries.

“To be truthful, what took place failed to shock me simply because the Personnel Social gathering in its govt method stated that it was going to do specifically that, that it was likely to terminate (the sales),” explained Paulo Valois, associate at Schmidt Valois Advogados.

Reporting by Marta Nogueira Enhancing by Richard Chang

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