Braskem to Sign Revised Naphtha Contract with Petrobras

Brazil's Braskem SA (BAK) , Latin America's largest petrochemical company, said on Friday it had agreed to a revised naphtha supply contract with shareholder Petrobras, staving off a threatened shutdown of its Brazilian plants.

The contract with Petroleo Brasileiro SA, as Petrobras is formally known, extends the supply agreement until Aug. 31, 2015, Braskem said in a statement sent to reporters by email.

It also said the revised contract will use a price retroactive to March 1, when the new agreement is expected to be signed.

Without a contract, many of its Brazilian plastics and chemicals plants will have to shut down, chief executive Carlos Fadigas said earlier this month.

Braskem's Brazilian operations have been suffering in the face of a corruption scandal at Petrobras and because its Brazilian plants must pay more for feedstock such as natural gas and naphtha than their foreign competitors or their own plants in the United States.

Petrobras owns 36 percent of Braskem, but the company is controlled by Brazil's Odebrecht Group, which also provides construction and engineering and other services to Petrobras.

Odebrecht has been implicated along with about 20 other construction engineering and energy companies in a giant contract fixing, bribery and political kick-back scheme, according to Brazilian police and prosecutors.

Petrobras has stopped paying or signing new contracts with many of these construction companies.

Getting a new agreement has proved difficult by the Feb 4 resignation of nearly all of Petrobras' senior executives and the company's efforts to deliver audited 2015 accounts delayed by auditors' concerns about the impact of corruption on the value of Petrobras assets.

(Reporting by Jeb Blount; Editing by Ken Wills)