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Brazil's Car Wash corruption probe eyes Petrobras bunker fuel deals

FILE PHOTO: A man walks in front of the headquarters of Petroleo Brasileiro S.A. (Petrobas) in Rio de Janeiro, Brazil March 9, 2020. REUTERS/Sergio Moraes/File Photo

SAO PAULO/RIO DE JANEIRO (Reuters) - Brazilian police on Wednesday expanded the Car Wash corruption investigation to alleged kickbacks valued at $8 million on contracts for bunker fuel bought by state-run oil company Petroleo Brasileiro SA PETR4.SA for its fleet of tankers.

A police statement said searches were carried out in Rio de Janeiro as part of the investigation, which is targeting unnamed Petrobras officials for their role in the transactions, which were allegedly carried out between 2009 and 2018.

The head of Brazil’s “Car Wash” prosecution unit, Alessandro Oliveira, said authorities were looking into transactions in Brazil and Singapore.

The statement indicates that a long-running probe into Petrobras’ dealings with some of the world’s largest commodity trading firms - including Vitol, Glencore, and Trafigura - is expanding geographically. Until now, the probe has been largely focused on Petrobras’ Houston operations.

In a statement to Reuters, Petrobras said it is the victim of corruption, rather than its perpetrator, and that it has assisted authorities with dozens of criminal investigations, as well as 21 administrative probes.

The Car Wash probe, known in Portuguese as Lava Jato, began in 2014 with the arrest of a currency dealer and mushroomed into Brazil’s biggest ever graft scandal, mainly involving Petrobras contracts in which some 200 businessmen, officials and politicians have been convicted.

In the Wednesday statement, prosecutors said there were indications Petrobras employees arranged a system with corrupt traders so that sweetheart contracts would be awarded on a rotating basis. They said they were investigating executives of trading companies.

In 2019, Reuters reported that Petrobras detected suspicious transactions in its Singapore trading division as early as 2012 but failed to stop them.

Reporting by Ana Mano and Anthony Boadle in Sao Paulo and Gram Slattery in Rio de Janeiro; Editing by Steve Orlofsky and Lisa Shumaker

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