Start Petrobras ordered withdrawal of payments to SBM Offshore

Petrobras ordered withdrawal of payments to SBM Offshore

July 5, 2018 8:56 am to 08:56
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SBM Offshore said Thursday that an interim judge in Brazil has ordered Petrobras to begin withholding a percentage of monthly payments due to SBM Offshore under certain charter contracts as collateral in connection with the misconduct lawsuit. The lawsuit was filed by the Federal Public Ministry in December 2017, based on the Brazilian Law of Improbity, in the Federal Court of Rio de Janeiro, against, among others, SBM Offshore. The federal prosecutor asked the court to impose an interim injunction as a means of securing payment for potentially awarded damages.

The decision to withdraw certain monthly payments references the fact that SBM Offshore is headquartered abroad and the company's recovery from any damages is contingent on international legal cooperation and (in)availability of assets in the future, the FPSO expert said. According to SBM Offshore, before making a decision on the amounts to be withheld, the judge is requesting more information from Petrobras and SBM Offshore.

SBM Offshore “strongly disagrees”

“Petrobras is requested to indicate its interest in becoming the author of the improbity action, as well as to present evidence on the impact of withholding values. The Company is requested to provide financial information about the contracts that are part of the object of this litigation. The federal government is also requested to indicate its interest in this litigation,” added SBM Offshore.

The Dutch supplier of floating production units added: “The Company strongly disagrees with the provisional decision, is seeking further clarification and is taking all appropriate steps to defend its interests. The company will inform markets if and when new information becomes available.”

Furthermore, SBM Offshore said that in recent months, the discussion between the Ministry of Transparency, Inspection and Control (MTFC), the General Council of the Republic (Advocacia Geral da União – AGU ”), Petrobras and SBM Offshore, related to to the leniency agreement, advanced.

“The Company has contacted the parties to this discussion to assess the next steps in light of the development of the Misconduct Law. Under the current circumstances, the Company cannot guarantee that a satisfactory resolution will be reached,” SBM Offshore said.

As per 2017 figures, SBM Offshore was responsible for the operations of 14 units and the maintenance of 16 units in the worldwide rental fleet, consisting of 13 FPSOs, 1 FSO, 1 MOPU and 1 semi-submersible unit. In 2017, Brazil was responsible for most of SBM Offshore's fleet operations, with a total of seven offshore FPSOs in Brazil, with a production capacity of 870,000 bopd.

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