(Adds details on court's decision, comments from Petrobras,
context on divestment plan)
By Roberto Samora
SAO PAULO Dec 7 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
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