Brazil’s Petrobras has canceled a drillship contract with Ensco over alleged graft payments, an allegation the rig firm has denied.

According to Reuters, Petrobras has declared its lease contract for the DS-5 drillship void due to alleged graft payments made to a third party marketing consultant.

The rig was originally chartered in 2008 from Pride International, a company that was purchased by UK-based Ensco in 2011.

In a notice filed with the U.S. Securities and Exchange Commission on Tuesday, Ensco said Petrobras alleges that Pride International knew about “improper payments” made by the shipbuilder of the DS-5 to a former third-party marketing consultant.

The consultant also allegeldy shared some of the payments with former Petrobras employees.

Petrobras also claims that Pride International may have assisted or facilitated the improper payments, according to the notice.

Ensco has denied any wrongdoing and said it has found no evidence that “any current or former employee of Pride or Ensco was involved in any wrongdoing, had knowledge of any wrongdoing, or authorized the former third-party marketing consultant to engage in any wrongdoing on behalf of Pride or Ensco with respect to the shipbuilding contract for DS-5.”

The rig firm added that it has not been contacted by other Brazil governmental authorities regarding alleged wrongdoing by Pride, Ensco or any current or former employees.

Ensco said it disagrees with Petrobras’ claim that the DS-5 drilling services contract is void and intends to assert its legal rights under the drilling services contract.

The firm has notified Petrobras of its position but said there can be “no assurance that Petrobras will continue to perform its obligations under the contract or that Ensco will be able to enforce its legal rights.”
Ensco’s other rigs operating for Petrobras – ENSCO 6001, 6002, 6003 and 6004 – continue to work under their contracts.

Petrobras has been embroiled in two high profile corruption probes in Brazil linked to alleged contract price fixing and graft.

Brazilian prosecutors charged 12 people early last month in connection with alleged bribery between Petrobras and SBM Offshore employees as part of a new probe into suspected graft payments.


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