By PETER MILLARD and SABRINA VALLE
Prosecutors in Brazil are expanding a money-laundering probe
linked to state-run Petroleo Brasileiro, or Petrobras, as a
court considers freezing CEO Maria das Gracas Fosters
Investigators have turned to construction
allegedly bribed former refining
chief Paulo Roberto
Costa, according to the federal prosecutors office in
Curitiba where the case is before a judge. Eleven additional
search warrants to gather evidence on Costa have been issued,
the prosecutors office said in an e-mailed statement.
Petrobras comes under scrutiny ahead of every national
election, according to President Dilma Rousseff, who defended
Foster at a campaign event in northern Brazil yesterday.
Rousseff is seeking re-election October.
I think it is extremely wrong to use the biggest oil
company in Latin America and the biggest company in Brazil,
always during elections, as a political weapon,
Petrobras on Aug. 8 denied reports that Foster was at risk of
losing her job.
The money-laundering case, dubbed Car Wash by
police, is gaining speed as Congress conducts a separate
probe of Petrobras for runaway spending at refinery project
s and allegedly overpaying
for a plant in Houston. Meanwhile, Brazils audit court
is deciding whether it will freeze Fosters assets in
Brazil while the investigations are carried out.
Costas attorney, Nelio Machado and Petrobrass
press office didnt immediately respond to e-mails and
phone calls requesting comment. Rousseffs press office
didnt respond to an e-mail seeking comment.
Petrobras has been the most volatile oil company with a
market value of more than $50 billion in 2014, according to
data compiled by Bloomberg. Rousseffs weak
showing in some polls has helped fuel a 22% rally this year
as investors speculate a new administration may end fuel
subsidies, boosting profits at the most-indebted
publicly-traded oil company.
Shares fell 2.6% to 20.84 reais at 1:29 p.m. in Sao Paulo.
The Rio de Janeiro-based company is the biggest
publicly-traded oil company in Latin America. State-owned
Petroleos de Venezuela SA has larger proven reserves.