Petrobras' Chief Dutra Takes Leave of Absence

Brazil's embattled state-run oil company Petroleo Brasileiro SA said on Friday that the director of its corporate-services division will take a 90-day leave of absence for health reasons.

Dutra, a former Brazilian Senator, served as Petrobras' chief executive officer for two and a half years from 2002 to 2005 and president of Brazil's ruling Workers Party from 2010 to 2011. He was one of two senior executives that did not resign their posts on Feb. 4 in an expanding corruption scandal that many believe to be the biggest in Brazil's history.

He will be temporarily replaced during his leave by Petrobras employee Antonio Sergio Oliveira, a 38-year veteran of the company.

The corporate-services division is responsible for managing all the company's major construction and engineering contracts and carrying out tenders for the other operational divisions. Until January, corporate-services was also responsible for governance issues such as compliance with internal controls and the legality of corporate actions.

According to police and prosecutors, Petrobras senior managers conspired with construction and engineering company executives to inflate the price of contracts to build refineries and ships, repair equipment and other goods and services.

Some of that excess was then kicked-back to Petrobras executives and politicians as bribes or political campaign contributions to President Dilma Rousseff's ruling Workers' Party and its allies in Congress.

Rousseff was chairwoman of Petrobras from 2002 to 2010 when much of the alleged graft took place. Rousseff has said she did not know about illegal activities.

Three Petrobras senior executives, including Dutra's predecessor as corporate services chief, and three dozen construction executives, and intermediaries have been indicted in the case.

A federal prosecutor in Brasilia is expected to deliver charges against a number of sitting politicians allegedly related to the corruption to Brazil's Supreme Court in the coming days.

Dutra is the second senior executive to take a leave of absence in nearly four months. In November, Sergio Machado, head of Petrobras' shipping and pipeline unit and allegedly named in the graft probe by cooperating witnesses, took a one month leave of absence that has since been extended and he remains off the job.

At the time, Machado called the allegations frivolous and absurd but enough to lead auditors PricewaterhouseCoopers to question his position at the company.

Unlike Dutra, Petrobras did not say Machado's leave was for health reasons.

(Reporting by Jeb Blount; Editing by Chris Reese and Diane Craft)