Last week the FCPA Blog reported that Petrobras announced it was not working with U.S. authorities to resolve potential Foreign Corrupt Practices Act claims against the company. In a filing with the U.S. Securities and Exchange Commission  Petrobras said, “There are no ongoing negotiations regarding the eventual payment of a fine for the winding up of civil and criminal investigations in the United States regarding the violation of the anti-corruption legislation.”

It is most unusual for a company to declare publicly  that it is not working to resolve any outstanding FCPA issues. Nothing about the Petrobras corruption scandal, however, is “usual.” What made this announcement even more peculiar was that it was in response to a Reuters story from earlier last week that had stated: “Brazil's Petrobras may need to pay record penalties of $1.6 billion or more to settle U.S. criminal and civil probes into its role in a corruption scandal, a person recently briefed by the company's legal advisers told Reuters.”

This same anonymous sources went to say, “State-run Petroleo Brasileiro SA, as the company is formally known, expects to face  the largest penalties ever levied by U.S. authorities in a corporate corruption investigation, according to the person, who has direct knowledge of the company's thinking. The settlement process could take two to three years.” Finally, the article added the voices of two additional anonymous sources “with direct knowledge of Petrobras' plans” who also said that any settlement “while several years away, would likely be ‘large,’ but declined to give a specific estimate.”

While a $1.6 billion FCPA settlement would dwarf the current top amount of $800 million paid by Siemens in 2008, it would seem highly unlikely that either Petrobras or the relevant U.S. authorities would be in any position to enter into monetary negotiations at this point in the ever-burgeoning scandal. Much more probable is that any resolution is years away.

This Reuters report and Petrobras denial, however, do bring up an excellent issue for any U.S. company that has done business with Petrobras over the past several years. Both the SEC and the Justice Department will be looking closely not only at Petrobras Brazil, but also Petrobras USA and any U.S. companies that have done business with either entity—or any other Petrobras entity, for that matter. U.S. companies should be looking at all contracts and business relations in this arena to prepare for the next wave of U.S.-led investigations.