Petrobras CEO to Defend E&P Contract in Congress

Jose Gabrielli, CEO of Brazil's federal energy company Petrobras (NYSE: PBR), will defend in a public hearing in the lower house his company's new E&P contract with Bolivia's state oil company YPFB, Petrobras said in a statement.

The hearing is tentatively scheduled for December 6 with the lower house's mines and energy committee. The committee also wants to hear from mines and energy minister Silas Rondeau about the contract.

Congressman Raul Jungmann of the opposition PPS party wants Petrobras to give more details on the agreement to determine whether it is in the company's interests, the lower house said in a statement.

It is not clear from the minutes of the contract that the company guaranteed returns on some US$1.5bn invested in Bolivia, Jungmann said.

The congressman also wants to make sure Petrobras will remain an operator in Bolivia not just a service provider to YPFB.

Petrobras said in the statement the minutes were not the final version of the contract and investments are guaranteed. Further, Petrobras still can take YPFB and Bolivian authorities to international arbitration courts if its investments are threatened, but the company cannot publish contract details because of certain confidential clauses.

The two companies signed the E&P deal at midnight on October 28, ending six months of negotiations following the May 1 nationalization of Bolivian hydrocarbons.

Bolivia's congress needs to ratify the new contracts.

Opposition parties in Brazil have criticized government agreements with Bolivia.

Petrobras and YPFB still have to conclude talks over gas export conditions and compensation payments for the nationalization of Petrobras refining assets in Bolivia.

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