Petrobas agrees to pay $3bn to settle US lawsuit over corruption scandal

Three-year legal battle began after Brazilian prosecutors exposed web of bribes and kickbacks that engulfed two former presidents

Petrobras will make two payments of $983m and a further instalment of $984m (AFP/Getty)

Brazil’s state-run oil company, Petrobras Brasileiro, said it will pay $2.95bn (£2.2bn) to settle a US lawsuit brought by investors who claim they lost money due to a massive corruption scandal that hit the energy giant’s shares.

The deal ends a three-year legal battle for Petrobras that began after Brazilian prosecutors exposed a web of bribes and kickbacks that has engulfed several high-profile politicians, including two former presidents.

In July, former Brazilian premier, Luiz Inácio Lula da Silva – Lula, as he is widely known - was sentenced to nine years and six months in prison after being found guilty on corruption and money-laundering charges. He has appealed the decision. His successor, Dilma Rousseff, also faces charges relating to the scandal but denies wrongdoing.

The complainants in the class action suit argued that Petrobras knew about corruption at the company and was complicit in concealing it from investors and the public.

They alleged that the company inflated the value of assets and projects so it could boost the profits of contractors who then kicked hundreds of millions of dollars back to Petrobras employees and politicians. The company later wrote down the value of assets by billions of dollars.

In a stock market announcement on Wednesday, Petrobras denied any liability and did not admit any wrongdoing. The company said it was a victim of the bribery scheme which was uncovered by a criminal investigation known as Operation Carwash.

The firm said it had recovered 1.475bn Brazilian reais in restitution and “will continue to pursue all available legal remedies from culpable companies and individuals”.

Petrobras will make two payments of $983m and a further instalment of $984m, with the final amount due in January 2019. The settlement, which still requires approval by a judge, will bring an end to some of the uncertainty surrounding Petrobras’ potential liabilities relating to Operation Carwash, which some analysts had predicted could be significantly higher.

Only investors who bought shares in the US are covered by the deal, Petrobras said.