Petrobras to Appeal Ibama's US$99mn Campos Basin Fine

Brazil's federal energy company Petrobras (NYSE: PBR) will appeal a 213mn-real (US$98.8mn) fine levied by federal environmental protection agency Ibama for operating 101 offshore wells in the Campos basin without proper authorization, Petrobras said in a statement.

According to Ibama, Petrobras did not comply with an agreement between the two entities signed in August 2004.

Petrobras will argue in its appeal it did comply with all clauses in the agreement.

The wells for which Petrobras is being fined were already in production in 1998 already in production in 1998, when the government opened the oil sector to private investments and changed licensing procedures for new wells.

Petrobras agreed to obtain licenses for the wells it operated before 1998 that remained in its hands, but Ibama said that even with new licenses for the old wells Petrobras should have sought authorization before continuing production.

Petrobras will argue in its appeal that this interpretation is wrong and high production control standards mean that operations do not threaten the environment.

Ibama announced the fine on Thursday and said Petrobras had 10 days to appeal and pay the fine after being officially notified.

Petrobras is also trying to obtain authorization from Ibama for some 5,000km of gas pipelines that were also operating before the implementation of local environmental protection legislation in 1985, local news service Agencia Estado reported.

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