Petroleo Brasileiro SA, Brazil et al vs. U. S. Fidelity et al
Oil and Gas
Surety Claim, Financial Advisor
Surviving a Bankrupt Contractor
Petrobras, the national oil company of Brazil, filed a claim under its surety bond with two U.S. insurance carriers, US Fidelity and Guaranty Company and American Home Assurance Company who had provided coverage to Brazilian contractors for the construction of two naval oil rigs known as P-19 and P-31 at a coverage amount of $110 million and $168 million respectively. P-19 was the conversion of a platform formerly used for oil and gas exploration into a semisubmersible oil and gas production platform. P-31 was the conversion of an oil tanker into a floating production, storage and offloading vessel.
Counsel required assistance from a forensic accountant to assess the financial condition of the contractors at the time of the underwriting; the credit evaluation process undertaken by the sureties of the contractors; the bid process; the system’s process for the purchase and payment of goods for the projects; the costing of the projects by Petrobras and a delay claim schedule of all construction activity.
Ultimately, the Court awarded Petrobras $245 million in damages, about $108 million in pre-judgment interest and attorney fees. Counsel kindly described Lindquist as the “secret weapon”.
Read “U.S. Fidelity and GUAR. V. Braspetro Oil Services” dated July 25, 2002