Petrobras to Appeal Decision in Tax Dispute

RIO DE JANEIRO - Brazilian state-run energy giant Petroleo Brasileiro, or Petrobras, said Monday that it would appeal a judge's decision against the company in a dispute over tax payments for oil-platform leases.

Petrobras had asked a local judge to dismiss a tax case brought against the company by Brazil's Internal Revenue Service for unpaid taxes between January 1999 and December 2002. The tax authority sanctioned the company for not deducting income taxes for lease payments on offshore oil platforms made to companies operating in countries with more favorable tax rates, Petrobras said.

"The company and its legal counsel are evaluating the adequate path to reverse this decision," Petrobras said, adding that it would appeal the ruling.

Petrobras said that possible losses related to the dispute were estimated at 4.78 billion reais ($2.35 billion). The company said that it hasn't made any provisions for potential losses related to the tax dispute.

Copyright (c) 2012 Dow Jones & Company, Inc.

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