Home Fossil Energy Saipem cheers reversing of two-year restriction on public contracting activity in Brazil
October 18, 2024, by Melisa Čavčić
Italy's engineering, drilling, and building providers Saipem has actually invited the lifting of limitations on brand-new agreements in Brazil, after being prohibited from striking handle the nation's public administration previously this year. This makes sure the company's go back to the Brazilian oil and gas phase.
Illustration; Source: Saipem
After the Controladoria-Geral da União (CGU) checked out allegations versus Saipem, a subsidiary of the Italian energy international Eni, concerning participation in abnormalities with Petrobras, which supposedly happened throughout the execution of an agreement to perform the setup of an undersea gas pipeline in which its 2 company systems, Saipem and Saipem do Brasil, were associated with 2011.
As an outcome, the CGU, through the Inspector General of the Union (CRG), set up, on April 30, 2019, an administrative responsibility procedure (PAR) versus the Italian gamer to examine those declared abnormalities that took place throughout the execution stage of the agreement for the setup of the submarine gas pipeline linking the Lula and Cernambi fields in the Santos Basin, 280 km off the coast of the State of Rio de Janeiro.
According to the CGU, among the possible abnormalities would be the payment of a kickback to a public representative at Petrobras for support in a competitors, which led to the finalizing of an agreement in December 2011. These abnormalities were examined as part of Operation Lava Jato, leading to the conviction of among Saipem's agents in Brazil and a previous director of the state-owned energy giant.
The Brazilian administrative authority provided on January 12, 2024, its last judgment in the administrative procedures started versus Saipem and Saipem do Brasil concerning supposed abnormalities in the award of an agreement for the gas pipeline setup by the BM-S-11 consortium.
While the judgment changed the CGU's previous interim choice, including the restriction on contracting with the Brazilian public administration provided on December 29, 2022, and replaced it with a“momentary”suspension restricted to a duration of 2 years, Saipem and Saipem do Brasil were identified to appeal it, considering the choice “irregular” with what they showed throughout the procedures.
As an outcome, the Federal District Court of Brasilia has actually annulled the order of the CGU which forbade the Italian gamer's affiliates from participating in contracting activity with the Brazilian public administration for 2 years. In reaction to the court's choice, Saipem stated it was pleased to find out that the premises of appeal developed by the 2 business' defenses were promoted.
“Since this is a judgment nullifying an administrative procedure, under Brazilian law, an appeal stage need to now follow, throughout which the results of the annulment judgment are suspended. Saipem SA and Saipem do Brasil will continue to take all required actions to make sure the security of their interests in the extension of the procedures,” according to the Italian company.
