From Reuters

A Brazilian federal court has blocked part of a $2.2 billion deal signed earlier this year by Petróleo Brasileiro SA and French oil major Total SA.

In a decision late on Tuesday, judge Edmilson da Silva Pimenta put on hold a key part of the deal: the sale by Petrobras, as the company is known, of part of its holdings in two of the most promising oil blocks in Brazil’s pre-salt layer.

Pimenta, a federal court judge in the northeast state of Sergipe, granted an injunction in favor of members of a local oil workers union who questioned the deal. They argued that Petrobras, as a government-controlled company, should have opted for a public tender to sell the oil assets instead of a private negotiation.

The judge agreed and asked oil and gas regulator ANP to suspend the transfer of the stakes.

Petrobras and Total signed a “strategic alliance” in March that included the transfer to the French oil firm of a 22.5 percent stake in the Iara area and 35 percent stake in the Lapa field, both in the pre-salt. The deal included the sale of Petrobras’ 50 percent stake in Termobahia, a thermal power complex with two plants.

Petrobras said on Wednesday it had not been formally informed about the decision. It said it would evaluate the ruling when officially notified and would take actions to defend its interests and those of its shareholders.

Pimenta has acted in a similar way in responding to previous legal questions raised by the same union, including a case regarding Petrobras’ proposed sale of its fuels distribution unit BR Distribuidora.

Brazil’s auditing court, known as the TCU, has also questioned some Petrobras asset sales in the past. This led to the oil company making changes to its divestiture program, adopting steps proposed by the TCU aimed at making tenders more transparent.

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