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TCU Identifies Governance Failures at Petrobras and Issues with Fertilizer Agreement Calculations with Unigel, Indicating Losses and Irregularities.
The technical area of the Federal Court of Accounts (TCU) identified irregularities in the contract for commissioned industrialization signed with Unigel, which allowed the resumption of operations at the fertilizer plants in Sergipe and Bahia. The governance failures at Petrobras and the distortions in the calculations that supported the signing of the contract were raised as concerns by the court.
The assessment of the oil company, mentioned in a TCU dispatch, indicates that the agreement will result in losses of R$ 487.1 million over the eight-month term.
Contract Between Petrobras and Unigel Raises Questions About Irregularities
Minister Benjamin Zymler ordered that the oil company, the Ministry of Mines and Energy (MME), and Unigel provide clarifications regarding indications of irregularities pointed out by TCU technicians.
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The auditors requested the precautionary suspension of the contract, but Zymler decided to hear the parties before making any decision.
Operation of the Agreement Between Petrobras and Unigel
How the agreement works: under the terms of the agreement, Petrobras retains the lease of its plants to the Unigel group while simultaneously contracting a company to operationalize the fertilizer production for eight months.
The oil company supplies the gas and receives fertilizer, becoming responsible for the commercialization of the products – along with the burden of a deficit operation.
In his dispatch, Zymler cites that Petrobras’s risk assessment indicated that the contract would lead to an expected loss of R$ 487.1 million, but the alternatives would be even more costly:
- R$ 1.23 billion to resume both plants by Petrobras;
- And R$ 542.8 million if the contract is not executed and the plants are not resumed by the state-owned company;
Irregularities Identified in the Lease Agreement
The TCU pointed out irregularities in the contract process, beyond the failures in the financial justification of the deal and the problems in risk qualification and quantification of the expected economic value of the evaluated alternatives.
The technical area identified a failure in Petrobras’s governance, as the agreement was approved by only one director and signed by an executive manager subordinate to him, without the effective participation of other higher instances of the state-owned company.
In addition, it considered that the oil company assumed risks with the deal in an unfavorable market scenario, through the signing of a ‘deficit contract, incapable of offering a definitive solution to the situation and without a clear demonstration of the benefits that would be derived by Petrobras’.
Source: EPBR
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