Petrobras identifies irregularities in 2009 Braskem naphtha contract

23-Jul-15

Brazilian state-controlled oil company Petrobras said it has identified "irregularities" in the 2009 naphtha supply contract with local petrochemicals company Braskem, a sign that a widespread bribery scandal may have tainted the deal, as per Argus Petrobras said that it is "adopting the necessary administrative measures" and has also shared the results of their internal investigations with authorities. Braskem said in a statement to the local securities regulator that it is conducting its own independent investigation and does not believe that the Petrobras investigation can be considered conclusive because Braskem employees did not participate. The two companies are currently negotiating a long-term naphtha supply contract, which needs to be signed by 31 August. In February, the two companies reached a last-minute agreement to extend its naphtha supply contract for six months. This was the third contract extension Braskem depends on Petrobras for 70% of its naphtha requirements and imports the rest from other suppliers. Because of logistical constraints, Braskem cannot increase its naphtha imports