Petrobras has concluded arbitration discussions with respect to additional collection of Special Participation from the Marlim Field, involving Petrobras, the National Petroleum Agency (ANP), and the State of Rio de Janeiro, held under the auspices of the Chamber of Reconciliations and Arbitration of the Federal Public Administration of the AGU (CCAF/AGU). The parties have accepted the arguments of Petrobras regarding the method of calculating the amount owed, as well as the payments to settle the process.
The amount under discussion in the judicial process was approximately R$3.4 billion, but could have been as high as R$4 billion under calculations previously used by the ANP. The acceptance by the ANP of the Petrobras position reduced the amount owed to R$2.06 billion (R$1.36 billion net after deduction of the tax benefit from the payment).
In addition to the agreement reached in calculating the amount owed, Petrobras has proposed a payment schedule of eight monthly installments, the first commencing on October 30th, adjusted by the SELIC rate. The acceptance of the installment schedule must still be approved by the Board of Directors of the ANP.
Since 2007 Petrobras has contested in the courts the administrative decision of the ANP that resulted in the additional collection of the Special Participation tax. The lower court decided in favor of the ANP, whose decision was upheld by the Regional Federal Court of the 2nd Region, in a decision published on September 30, 2009. The final decision of the Federal Court is still pending, however, due to an appeal by the Company.
By reaching this settlement through arbitration, Petrobras avoids (a) the possibility of being required to pay an even greater amount in the case of losing a final judgment; (b) the possibility that the judgment would be executed immediately, given that it would no longer be possible to suspend the obligation to pay the amount ; and (c) the risk of ultimately being registered in debtor lists of the federal public sector, which could have led to restrictions on the Company’s ability to carry on in the ordinary course of business.
The payment in question definitively concludes any and all legal and administrative actions regarding this case.
Resolving this issue is in line with the joint policy of cooperation and partnership between Petrobras and the State of Rio de Janeiro, who continue to work together to contribute to the development of the State, as well as all Brazil. It is with this goal in mind that the Government of the State of Rio de Janeiro has agreed to offer fair and attractive conditions to encourage further investments by Petrobras in the State.
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