3 Min Read
(Adds details on court's decision, comments from Petrobras, context on divestment plan)
By Roberto Samora
SAO PAULO, Dec 7 (Reuters) - Brazil's federal auditing court (TCU) asked state-controlled oil company Petrobras on Wednesday to temporarily suspend its divestiture program while the court reviews asset sales procedures.
The decision could delay Petrobras efforts to raise $15.1 billion from asset sales by the end of 2016 as a way to reduce its huge debt -- the largest in the global oil industry.
The company wants to raise $19.5 billion more in 2017 and 2018.
The court said five ongoing Petrobras asset sales that are nearing conclusion can be finalized, accounting for around $3.3 billion, but asked the company to refrain from signing any new sale plans 'until new order.'
There is no date set for a final ruling by the court.
TCU's decision follows recommendations from its experts about procedures used by Petroleo Brasileiro SA, as the company is formally known, on the asset sales.
According to the decision published on Wednesday, the court thinks the company should be much more transparent in its divestiture program as it is a state-controlled entity.
Laws governing public entities in Brazil require ample disclosure of business information.
There is a debate among lawyers regarding to what degree those laws would apply to a company that is also owned by private investors, as is the case with Petrobras.
Petrobras said the TCU ruling is positive in a sense, since it allows the firm to close deals that were near completion. It said it plans to comply with the court's determination.
"The company is already reviewing its divestment procedures and is committed to following the court's recommendations for improvements," Petrobras said in a statement.
Petrobras reaffirmed its targets to raise $15.1 billion by end-2016 and $19.5 billion more in the next two years.
Although the TCU said it would let Petrobras conclude deals that are already well-advanced, it is not clear how many of the recent transactions the oil company would be able to finalize if it strictly follows the court's order.
Petrobras's Chief Executive Officer Pedro Parente said 10 days ago that the firm had raised close to $11 billion in asset sales so far and that it intended to reach the $15.1 billion target by the end of December. (Writing by Marcelo Teixeira; Editing by Daniel Flynn and Alistair Bell)