July 11, 2017 / 1:59 AM / a year ago

Brazil's Petrobras, UTC at odds over services contract cancellation

RIO DE JANEIRO, July 10 (Reuters) - Brazilian engineering firm UTC Engenharia SA and state-controlled oil giant Petroleo Brasileiro on Monday gave conflicting reasons for halting a platforms-servicing contract in the Campos Basin, in a spat that could hit operations.

Petrobras, as the oil company is known, said in a press release that UTC chose unilaterally to discontinue construction services on the platforms, following “attempts by Petrobras to negotiate a solution that gave priority to workers.”

UTC, however, in an emailed statement, said Petrobras decided against extensions for offshore maintenance contracts, as foreseen by a prior agreement.

“In order to defend the interests and labor rights of its qualified staff, UTC continues to try, with Petrobras, to regularize and extend the contracts,” said the company, which was involved in the biggest corruption scandal to hit Brazil.

Under a long-running scheme, a group of engineering firms including UTC bribed politicians and Petrobas executives in exchange for inflated contracts. UTC on Monday signed a leniency deal agreeing to pay the government 574 million reais ($176 million) for fraud related to 29 contracts with state-owned companies including Petrobras.

According to UTC, the contracts are related to platforms P-18, P-19, P-20, P-26, P-33, P-35, P-37, P-50, P-52, P-54, P-62, all located in the Campos Basin near Rio de Janeiro, the main oil production hub in Brazil.

Petrobras said it was taking steps to maintain operations and security, adding that it would take appropriate “administrative and judicial measures” in the case. (Reporting by Roberto Samora; Editing by Bill Trott)

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