Rio de Janeiro, November 13, 2014 – Petróleo Brasileiro S.A. – Petrobras announces that it will not file its third quarter 2014 financial statements (ITR 3Q14) accompanied by a review report of its Independent Auditors, PricewaterhouseCoopers (PwC), with the Comissão de Valores Mobiliários (Securities and Exchange Commission) of Brazil (CVM) within the period required by CVM Instruction 480/09, for the reasons stated below.
As has become known publicly, Petrobras is undergoing a unique moment in its history, in light of the accusations and investigations of the “Lava Jato Operation” being conducted by the Brazilian Federal Police, which has led to charges of money laundering and organized crime against the company’s former Downstream Director, Paulo Roberto Costa. The former director is currently under investigation for corruption and embezzlement, among other offenses.
Faced with these circumstances, and considering the declarations of the former Downstream Director in a federal court on October 8, 2014 that, if found to be true, could potentially affect the company’s financial statements, Petrobras has taken numerous steps aimed at furthering related investigations.
Within this context, on October 24 and 25, 2014 Petrobras hired two independent law firms specialized in conducting investigations – Brazilian firm Trench, Rossi e Watanabe Advogados and U.S. firm Gibson, Dunn & Crutcher LLP – to examine the nature, extent and impact of the acts that may have been committed within the context of the allegations made by former Downstream Director Paulo Roberto Costa, as well as to investigate related facts and circumstances that have a significant impact on the company’s business operations. Hiring these independent firms was recommended by the Audit Committee of the Board of Directors in compliance with the best international practices and authorized by the Executive Board.
However, as a result of the time needed to (i) gain greater understanding from the ongoing investigations by the independent law firms (ii) make any adjustments to the financial statements based on the accusations and investigations related to the “Lava Jato Operation” and (iii) evaluate the need for internal controls improvements, Petrobras is unable to release its third quarter 2014 financial statements at this time.
As a result, and in recognition of the importance of transparency, Petrobras expects to release its third quarter 2014 financial statements, without a review by its Independent Auditors, on December 12, 2014, reflecting its balance sheet based on facts that are known as of that date.
Petrobras is committed to releasing its third quarter 2014 results duly reviewed by its Independent Auditors as soon as possible. When the release date is set, Petrobras will inform the market at least 15 days in advance of publication.
Rio de Janeiro, November 14, 2014 – Petróleo Brasileiro S.A. – Petrobras, in compliance with the request made by the Comissão de Valores Mobiliários (Securities and Exchange Commission) of Brazil (CVM) to amend the press release issued on November 13, 2014, informs the following additional information:
Petrobras has chosen to release its third quarter 2014 financial statements, without a review by its Independent Auditors, by December 12, 2014, in order to keep the market informed in recognition of the importance of transparency. The Company expects that by then it will have a better understanding from the ongoing investigations by the independent law firms and by the Brazilian regulatory authorities, allowing for more accuracy in connection with any necessary adjustments to the financial statements based on the accusations and investigations related to the “Lava Jato Operation”.
Moreover, the Company has several financial contracts with covenants that provide for the delivery of quarterly financial statements, audited or unaudited, to the financial agents within 90 (ninety) days following the end of the quarter. These provisions allow the Company until 12.30.2014 to deliver the third quarter financial statements. Thus, in accordance with its contractual obligations, Petrobras has until that date to present the financial statements.
In light of the ongoing investigations, it is currently not possible for the Company to determine an estimated date for the disclosure of its Quarterly Financial Statements (ITR) for the period ended 09.30.2014, together with the review report issued by the Independent Auditors. Furthermore, the date to be established for the disclosure of these financial statements together with the review report of the External Auditors is still contingent upon assessments from the Company’s Auditors. As soon as the Company has more definition in this regard, the Company will announce the anticipated disclosure date to the market, at least 15 (fifteen) days in advance.
Finally, the credit rating agencies will be informed of the reasons why the Company did not disclose its financial statements with a review for the third quarter within the time period prescribed under Brazilian law, as well as the measures that have been taken by the Company.
