March 22, 2014 / 12:05 AM / 6 years ago

UPDATE 1-Brazil's Petrobras says board approved dismissal of subsidiary CFO

(Adds background on Cervero, Petrobras)

SAO PAULO, March 21 (Reuters) - Brazil’s state-run oil firm Petroleo Brasileiro SA said the board of its distribution subsidiary had approved the dismissal of its Chief Financial Officer Nestor Cervero on Friday, according to a securities filing.

The president of the subsidiary, Jose Lima Andrade Neto, will temporarily take over his responsibilities, the filing said, giving no reason for Cervero’s dismissal.

Cervero was the international director of Petrobras, as the company is known, at the time of a controversial purchase of a refinery in Pasadena, Texas. Public prosecutors are investigating irregularities in the 2006 purchase.

President Dilma Rousseff, who polls show as the favorite ahead of an October presidential election, was head of Petrobras’ board and chief of staff for former President Luis Inacio Lula da Silva when the refinery purchase was approved.

Investigators at Brazil’s TCU audit court say the refinery had a market value of around $50 million but that Petrobras paid $1.2 billion for it over several years.

Rousseff publicly defended her role in the purchase decision this week in a statement that blamed Cervero for producing a incomplete and flawed summary of the deal on which the board based its approval.

Petrobras is also conducting an internal investigation over allegations that Petrobras officials accepted bribes from Dutch ship leaser SBM Offshore NV through an intermediary.

The allegations come at a delicate time for Petrobras, which is tackling high debt levels due in part to the government’s practice of keeping domestic fuel prices low to curb inflation, forcing the company to import gasoline at a loss. (Reporting by Eduardo Simões and Caroline Stauffer; Editing by Bernard Orr)

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