Brazil’s state-run oil firm Petroleo Brasileiro SA said in a securities filing on Wednesday it was not in negotiation to pay a fine to settle criminal and civil investigations in the United States.
Reuters reported on Tuesday that Petrobras, as the firm is known, may have to pay record penalties of $1.6 billion or more to settle U.S. criminal and civil probes into its role in a corruption scandal, according to a person recently briefed by the company’s legal advisers.
Two other sources with direct knowledge of Petrobras’ legal plans also said that any settlement, while several years away, would likely be “large,” but declined to give a specific estimate.
All three sources requested anonymity, and cautioned that any estimates for the size of possible fines were very preliminary.
The oil company hired U.S. law firm Gibson, Dunn & Crutcher LLP and the Brazilian law firm Trench, Rossi e Watanabe to conduct an internal investigation into the allegations and has promised to turn over information to the authorities.
The law firms report to Ellen Gracie Northfleet, former chief justice of Brazil’s Supreme Court and Andreas Pohlmann. Gracie and Pohlmann were hired in December by the Petrobras board to ensure that the investigation remained independent.
Gibson, Dunn & Crutcher LLP said on Wednesday it had not discussed paying a fine with Petrobras regarding the U.S. Securities and Exchange Commision or Department of Justice investigations.
“We know of no such discussions by any legal advisors with Petrobras,” said Michael Diamant, a partner with the law firm, in a statement to Reuters.
The Department of Justice declined to comment on the Petrobras statement.
In November, the SEC sent a subpoena to Petrobras requesting information about the widening corruption investigations that have ensnared top company executives, major private contractors and senior politicians in Brazil. According to people familiar with the matter, the DOJ, which can bring criminal charges, is also investigating the company.
Petrobras also said on Wednesday U.S. authorities had not made a decision about the merit of the investigation or eventual fines involved. Petrobras press officials declined to say how they knew about the U.S. government’s thinking.