Brazil’s Petrobras faces legal risks after halting asset sales -lawyers

RIO DE JANEIRO, March 3 (Reuters) – Petrobras (PETR4.SA) could face lawsuits for breach of contract after the organization halted planned asset sales at the request of Brazilian leftist President Luiz Inacio Lula da Silva’s govt, specialist legal professionals mentioned on Friday.

Petroleo Brasileiro SA, as the state-managed company is formally recognized, was requested this 7 days to halt for 90 days divestitures worthy of far more than $2 billion, with the federal government expressing it was reevaluating the country’s nationwide strength plan.

Lula appointee Petrobras Main Executive Jean Paul Prates told reporters on Thursday “everything is halted for examination.” Petrobras has but to formally verify its choice to the federal government.

“There is no possibility of suspending signed contracts. There is no stipulation for that,” Alexandre Calmon, lead husband or wife of legislation company Campos Mello Advogados’ power spot, told Reuters.

“That would be a breach of agreement,” he said, introducing if “Petrobras fails to do something that it is obligated to do, it can be held dependable.”

The lawyer also defined that sale processes by now signed but not concluded are not below the control of the oil firm. There are clauses in the agreement that must be fulfilled by all functions involved, Calmon explained.

Petrobras declined to remark additional.

Giovani Decline, a husband or wife specializing in oil and fuel at regulation business Mattos Filho, also flagged the “opportunity for lawsuits versus Petrobras for intentionally canceling signed transactions.”

“Suspending the product sales for political reasons qualified prospects to a discussion about breach of contract,” he additional, but observed that he could not “remember a similar problem in Brazil.”

Discounts nonetheless to be concluded contain the sale of 22 assets to 3R Petroleum (RRRP3.SA) for $1.38 billion and the sale of the Norte Capixaba cluster to Seacrest for up to $544 million.

Brazil’s mining and strength ministry and Seacrest – as well as BW Electrical power (BWE.OL) and Grepar, which also have contracts to acquire assets from Petrobras – did not quickly reply to requests for comment. 3R Petroleum declined to remark.

The sale halt marks a significant shift from the stance taken by previous President Jair Bolsonaro’s administration, which oversaw a variety of Petrobras belongings revenue, which includes oilfields and refineries.

“To be truthful, what took place did not shock me for the reason that the Staff Occasion in its authorities method said that it was going to do specifically that, that it was likely to terminate (the income),” claimed Paulo Valois, associate at Schmidt Valois Advogados.

Reporting by Marta Nogueira Enhancing by Richard Chang

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