Here’s How Much Petrobras ‘Partners-in-Crime’ Lost In Oil Scandal

4/06/2015 @ 5:17PM 2,354 views

Here’s How Much Petrobras ‘Partners-in-Crime’ Lost In Oil Scandal

Kenneth Rapoza /Forbes

The Petrobras oil scandal is taking billions of dollars out of the coffers of construction majors that colluded with the Brazilian state-owned company in a decades old fraud scheme.  But they are not the only ones feeling the pain. All told, five companies that partnered with Petrobras on refinery construction and other oil services needs lost $4.5 billion. This is the bare minimum. The number is going higher.

The $4.5 billion is the total value of the unpaid debt those five companies have filed protection against in bankruptcy court.

Some of Brazil’s biggest construction names have gone belly up because of the scandal. OAS, which was present in the construction of the Miami International Airport, was one of the first to file for bankruptcy last week.

Oil services firm Schahin is the next Petrobras partner unable to pay its bills, according to the local Estado de Sao Paulo newspaper.

One reason for the difficulty among construction majors is the fact the government has ceased payment on a number of projects. An investigation into fraud at Petrobras has led to dozens of arrests, the resignation of the oil company’s CEO Maria Gracas Foster, and over 35,000 layoffs at construction sites doing work for Petrobras. The government is not willing to pay for Petrobras projects until it can get a hold of monies lost in scandal.

Lawyers told Estado that the multi-billion dollar figure will surely rise in the weeks ahead.

All told, OAS is joined by privately held firms Galvao Engenharia, Alumini Engenharia, Iesa and Jaragua Equipments.

There are currently three class action lawsuits filed in New York’s Southern District Court.

On Monday, Swedish pension fund AP1 sued Petrobras directly as a minority shareholder with a reported 3.7 million in shares.

Dimensional Fund Advisors and six New York City pension funds have opted to file directly against Petrobras instead of joining the class action against Petrobras. New York law firm Pomerantz is the lead counsel.