Petrobras $PETR3 (+1.08%)
$PETR4 (+1.24%) is embroiled in a multi-million dollar legal dispute over the sale of onshore oil fields, which were a priority for the company during former President Jair Bolsonaro's term in office.
The plan was for the state-owned company to divest itself of "mature" areas with declining production. At the time, Petrobras sold these mature fields to focus on pre-salt areas and more profitable businesses. This strategy was part of a broader plan to divest Petrobras' assets.
However, under the current administration, there has been a change of direction and the state-owned company has suspended plans to divest onshore fields, but is sticking to contracts already signed.
Nevertheless, problems have arisen.
At the end of December, Seacrest Petróleo, an independent oil company originally from Norway that acquired part of the state-owned oil fields, filed a lawsuit with the Rio de Janeiro Court of Justice (TJRJ) for alleged breach of contract by Petrobras in the sale of the Norte Capixaba and Cricaré fields in Espírito Santo.
Seacrest claims that Petrobras failed to carry out the repairs to the underwater pipelines agreed in the purchase contract. Petrobras denies any breach of contract and claims that it is carrying out the necessary maintenance work.
At the same time, Seacrest initiated arbitration proceedings against Petrobras. The request for arbitration was filed with the International Court of Arbitration of the International Chamber of Commerce (ICC) on January 5. "Under the purchase and sale agreement for the Norte Capixaba Cluster, Petrobras undertook to complete the repairs [to the pipelines], but has repeatedly failed to do so in the 20 months since the contract was signed in April 2023," Seacrest said in a statement issued in Norway on January 6.
In the document, Seacrest reports that it sent a letter to Petrobras on April 16, 2024, demanding $38.78 million in compensation for alleged "damages" suffered by the company. On December 13 of the previous year, the Norwegian oil company updated the compensation amount to 71.2 million dollars in a further letter to the state-owned company.
According to court documents, Seacrest claimed that the asset sale agreement required Petrobras to repair the underwater pipelines of the Norte Capixaba terminal, where production from the Norte Capixaba and Cricaré fields is processed and stored. The repairs should be completed "preferably" before the closing of the sale, according to sources familiar with the matter. If the repairs were not completed by the time the sale was finalized, Seacrest expected "damage limitation" measures, which never took place, according to the company, which is represented in the case by law firm Mattos Filho.
Without a solution to the hopeless situation, Seacrest tried to stop the payment of 70.5 million dollars. The company obtained an initial temporary restraining order on December 26, 2024, during court recess, preventing the public company from taking action to collect the $70.5 million for 30 days. On January 27, Seacrest said in a statement that it had suffered "cumulative damages" from Petrobras' failure to repair the pipeline: "Petrobras' failure to meet its obligations and repair the pipelines forced the company to sell a below-specification blend of its production at a significant discount to Brent," Seacrest said. Due to the lower sales prices, Seacrest lost revenue and paid lower royalties to municipalities, Espírito Santo and the federal government, the sources said.
On Wednesday evening (08.01.2025), Seacrest obtained a second judgment, this time from the 11th Civil Court of the Capital District, which extended the scope of the first injunction: it upheld the suspension of the payment of 70.5 million dollars and prevented Petrobras from listing Seacrest as a defaulter in public or private credit registers, applying contractual penalties, calling obligations due early or taking actions that could be construed as a default.
When asked, Petrobras stated in a statement that it was taking appropriate contractual and legal measures to defend the company's interests in this case and "to recover the amounts established and undoubtedly due from Seacrest for non-compliance with contractual payment obligations in connection with the sale of onshore fields in the Cricaré and Norte Capixaba clusters".
Regarding the pipeline repairs, Petrobras said that it "fulfills its contractual obligation by performing the agreed services. Any claims by Seacrest will be investigated and in case of disagreement, the mechanisms established in the contract, namely arbitration, will be invoked." Seacrest did not immediately respond to a request for comment.