Petrobras Pays $700 Mln to Vantage Drilling

Monday, June 24, 2019

Brazilian state-controlled oil company Petróleo Brasileiro SA said on Friday it had made a $700 million payment to oil services provider Vantage Drilling Company in a case involving a contract that it had terminated.

Petrobras, as the oil company is known, said in a securities filing that it decided to make the payment following a decision by a U.S. court in Texas denying its request to cancel the result of an earlier arbitration in Holland opened by Vantage after Petrobras terminated a drilling contract in 2015.

Petrobras argued at the time that the contract had been awarded to the U.S. company "by way of corruption," according to findings by Brazil's Operation Car Wash anti-corruption investigation.

Vantage denied the accusation and said the contract was "wrongfully terminated. It won the arbitration in Holland, but Petrobras appealed the ruling in the Texas court. Petrobras had also appealed the court decision to uphold the arbitration ruling.

Petrobras said on Friday it decided to pay the amount to end interests in the condemnation and to free up some assets that had been frozen by the Dutch arbitration as a way to force it to comply with the ruling.

Petrobras said the payment does not mean an end to the litigation, as it continues to defend its position.

(Reporting by Marcelo Teixeira Editing by Leslie Adler)

Categories: Contracts Legal Finance Drilling

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