Sete Brasil Participacoes, a company that provides rigs to Brazil’s Petrobras, is considering legal measures against the Estaleiro Atlantico Sul (EAS) shipyard after the shipbuilder backed out of a $6 billion construction contract.

Brazil-based Sete was notified on Monday that EAS was canceling a contract to build drill ships set to be used by state owned Petrobras, Bloomberg said.

The cancellation was reportedly prompted by missed payments from Sete, O Estado de S. Paulo said.

EAS has not commented on the cancellation.

Brazil-based EAS is owned by Grupo Camargo Correa and Grupo Queiroz Galvao.

On Monday Brazilian prosecutors filed a lawsuit against Camargo Correa along with five other companies for alleged ties to corruption at Petrobras.

The government is suing the six companies for a total $1.5 billion in damages.

The suits also name 13 subsidiaries of the six companies and 28 executives as defendants, Reuters said.

Earlier this month former Sete director Pedro Barusco told federal police Sete was involved in a bribes-for-contracts scheme with Petrobras employees and said that he had personally accepted bribes, the Financial Times said.

According to Barusco’s testimony shipbuilding firms paid bribes worth about 0.9 percent of a contract’s value to a group of organizations and individuals including the treasurer of Brazil’s ruling Worker’s Party and employees at Petrobras.

Barusco also alleged that EAS participated in the bribes-for-contracts scheme.

Former Petrobras CEO Maria das Graças Foster resigned her post along with five other executives earlier this month amid an ongoing corruption probe into the company that has already landed three former executives in jail.

Foster has not been accused of any wrongdoing.

The scale of the corruption is still unknown although Brazilian authorities have claimed kickback and bribery schemes could have diverted anywhere between $3.7 billion to $28 billion from the company.


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