By Jeffrey T. Lewis
SAO PAULO--Brazilian oil producer Petroleo Brasileiro S/A, or Petrobras, said Wednesday that it had agreed to pay its employee pension fund 950 million reais ($183.7 million) to settle a case in arbitration over a failed investment in a company set up to build oil rigs.
The pension fund, Fundacao Petrobras de Seguridade Social, or Petros for short, had taken Petrobras to an arbitration court to ask for compensation for the losses associated with the fund's investment in Sete Brasil, which was founded in 2010 to manage a portfolio of oil-production equipment.
A steep drop in the price of oil after Sete Brasil was established, along with the Operation Car Wash investigation into corruption at the oil company, led to the cancellation of many of Sete Brasil's contracts with Petrobras and saddled Sete Brasil with billions of reais in debt.
The settlement with Petros will end the pension fund's arbitration case, with Petrobras admitting no guilt or responsibility, and won't affect any other litigation processes between the oil company and the fund, Petrobras said in a statement. Other terms of the agreement are confidential, Petrobras said.
The payment to Petros will be accounted for in Petrobras's earnings results for the second quarter, which the company will report Thursday after the close of market trading.
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(END) Dow Jones Newswires
July 29, 2020 20:33 ET (00:33 GMT)Copyright (c) 2020 Dow Jones & Company, Inc.