Keppel says may face Brazil corruption probe

A Keppel Corp employee at aKeppel FELS shipyard in Singapore.
A Keppel Corp employee at aKeppel FELS shipyard in Singapore. PHOTO: BLOOMBERG

SINGAPORE (Reuters) - Oil rig builder Keppel Corp said it may face an investigation into deals with Brazilian state-run oil company Petrobras and rig builder Sete Brasil.

A Brazilian parliamentary commission of inquiry backed further investigations into 10 companies it identified as involved in transactions with Petrobras and Sete, including a Keppel FELS Brasil unit, Keppel said in a statement late on Thursday (Oct 22).

The investigations follow allegations by a former engineering manager at Petrobras, which is caught up in a massive procurement corruption scandal that has contributed to efforts to impeach Brazilian President Dilma Rousseff.

Keppel FELS and its network of offshore yards are one of the world's biggest makers of offshore jackup rigs.

The firm rejected in February any involvement in the bribery scandal. Keppel said then it had a contract with an agent named in the scandal in Brazil, but said its official were banned from accepting bribes.

Keppel's cross-town rival Sembcorp Marine Ltd also said in February it wasn't involved in the Brazil scandal. Sembcorp didn't immediately respond to a request for comment on Friday (Oct 23).

Shares in Keppel and Sembcorp, which both reported weak quarterly results on Thursday amid an oil glut, slipped in early trading on Friday.

Sembcorp shares fell 4 per cent while Keppel was 0.8 per cent lower by 10:05 am. The Straits Times Index was up 0.8 per cent.

Keppel said in its statement that it would extend full cooperation to investigators if approached and had zero tolerance against any form of illegal activity, including bribery and corruption. The company declined further comment.