Graça Foster: investigation at Petrobras could take as long as three years

The investigation launched to determine the impact of corruption and embezzlement scheme in state-run oil giant Petrobras's coffers could take as long as three years, and should cost around $57.7 million this year alone. The estimate was published Thursday (Jan 29) by CEO Graça Foster during a conference call with investors and analysts to present the financial results for the third quarter in 2014, which have not been reviewed by external auditors.

“At smaller companies or even some nearly as large as us, it has taken around two years. Investigations are conducted at several levels, chief among them—and also the most urgent one—is that of our senior management—the CEO, the directors, the executive management. This has been the priority of the firms that have been here auditing. They have hired IT third parties to help them, which is included in the $57.7 million budget for 2015,” she explained.

According to Foster, testimonies heard as part of Operation Car Wash, launched by the Federal Police, mention that an average 3% of contract values has been paid in kickbacks, which amounts to an estimated $1.563 billion in losses. But this amount could increase with further investigations.

Sided with Petrobras directors, Graça Foster said that, as far as her knowledge about the company’s projects goes, even though she cannot predict the final outcome of the probe, she believes that the data under consideration by the company—projects impacted and kickback amounts—suggest that the number of projects that could represent losses are likely not to differ much from reality.

Foster emphasized that the work of compiling a balance sheet is not trivial. The company keeps contact not only with auditors, but also regulatory agencies such as the US and Brazil's Securities and Exchange Commissions (SEC and CVM), she said.

“We have been working desperately ever since we missed the deadline for having our results audited by Price. We've been working nonstop. We have no Saturday, Sunday, or holiday breaks. We just keep going. It's not trivial, it’s not simple (…), and it leads us to redefine Petrobras, according to its new projects. This is what has to be done—and it’s been done in a rather intense manner,” she added.

Translated by Mayra Borges / Fabrício Ferreira