Odebrecht seeks bankruptcy protection

Scandal-ridden Brazilian conglomerate Odebrecht filed for bankruptcy protection from a court in Sao Paulo state, a move it says will help it restructure its more than R51bn ($13bn) debt load.

The company said today its financial difficulties stem from the "reputational impact of mistakes made" and ensuing difficulty securing credit and new contracts.

Group companies will continue to operate normally as the firm focuses "on the common objective of ensuring financial stability and sustainable growth, thus preserving their social function of securing and generating jobs," the company said in a statement.

Staff levels at the company have fallen to around 48,000 from around 180,000 in 2014, the result of the scandal and resulting economic crisis from which Brazil is still struggling to exit.

Odebrecht was at the center of the historic Lava Jato (Car Wash) corruption probe that ensnared Brazil's business class and top politicians across Latin America, including former Brazilian presidents Luiz Inácio Lula da Silva and Michel Temer. Around 77 of the company's top executives turned state witnesses in the far-reaching probe that is still uncovering corruption after five years.

In 2016, Odebrecht admitted to paying around $788mn in bribes in 2001-16 for contracts in 12 countries, according to a $2.6bn plea deal with US, Brazilian and Swiss authorities

The decision to seek bankruptcy protection comes almost two weeks after the end of negotiations with Dutch company LyondellBasell for the sale of Odebrecht's 38pc stake in petrochemical giant Braskem.

Braksem is among the handful of subsidiaries excluded from the bankruptcy request. The company's oil and gas arm, Ocyan, formerly known as Odebrecht Oil and Gas, was also excluded from the request. Ocyan had been a major offshore platform contractor for state-controlled Petrobras before it and dozens of other companies were banned from bidding because of their involvement in a massive kickback scheme.

Ocyan's last major contract award from Petrobras was in 2014 for the 50,000 b/d FPSO Libra Pioneer, the early production system at the Santos basin's Mero pre-salt field. Mero, the first commercial discovery in the Libra project, currently produces around 40,000 b/d of 29°API crude.