RIO DE JANEIRO (Reuters) - Brazilian police arrested a former Petrobras executive on Friday and the state-run oil giant's shares (PETR4.SA) sank 5 percent after it was forced by a widening corruption scandal to delay the release of its financial results.
Former engineering director Renato Duque was the second senior Petrobras executive arrested in the investigation into a money laundering and bribery scheme that allegedly skimmed billions of dollars off contracts and into the pockets of politicians.
Police also raided the offices of leading construction and engineering firms, including Odebrecht and Mendes Junior. There, they seized potentially incriminating documents and arrested 18 people suspected of involvement in the graft scheme.
Petrobras said late Thursday it would delay the release of its third-quarter earnings due to the investigation.
Analysts warned that the corruption probe and postponed earnings statement could result in the company being stripped of its investment grade by ratings agencies and prompt it to write down fixed assets.
The move to delay the results announcement raised investors concerns that the world's most indebted oil company would be at risk of a technical default on tens of billions of dollars in bonds.
Ratings agency Moody's said it was monitoring the situation at Petrobras closely, but that the earnings delay would have no near-term impact on its credit rating.
Trading in shares of Petrobras opened more than an hour and a half after the rest of companies on the Bovespa index .BVSP on Friday.
The bourse's chief executive, Edemir Pinto, said the delay was ordered to ensure time for the market to digest the news.
"We are doing everything to ensure the small, medium and large-scale investors have transparency in relation to this issue," he said.
Credit Suisse Securities said Petrobras could be barred from accessing bond markets in the United States. It estimated the company might need to borrow as much as $20 billion from bond investors to finance projects next year.
The price on Petrobras' global bond due in 2024 tumbled to 100.75 cents on the dollar early on Friday, down from 104.5 cents in the previous session, amid concerns of a default.
Brazil's sovereign bonds also slumped on the news.
Petrobras said it planned to release unaudited results on Dec. 12. It did not set a date for publishing audited results, saying it would try to do so as soon as possible and would inform investors 15 days in advance.
Local newspaper Estado de S. Paulo reported earlier this month that PriceWaterhouseCoopers, which audits Petrobras' earnings, had refused to sign off on the third-quarter statement without a more in-depth internal investigation.
Petrobras hired Brazilian law firm Trench, Rossi and Watanabe and global law firm Gibson, Dunn & Crutcher last month to investigate possible deviations of company resources.
Some 300 police officers and 60 tax fraud agents were deployed in five states and the capital Brasilia on Friday.
The investigation, dubbed "Operation Car Wash," was first launched in March as police investigated the alleged money laundering scheme.
The scandal has put pressure on leftist President Dilma Rousseff, who narrowly won re-election last month. Rousseff was chairwoman of the Petrobras board between 2003 and 2010.
Rousseff has pledged "not to leave a stone unturned" in investigating and punishing those involved in the graft scheme.
Paulo Roberto Costa, a former Petrobras executive previously jailed in the case, has said in a plea-bargain deal that kickbacks of three percent from contracts were funneled to Rousseff's Worker's Party and its allies in Congress during his time as head of refining between 2004 and 2012. Police say some 10 billion reais ($3.84 billion) was skimmed off contracts.Police said on Friday the offices of seven companies, that had contracts worth billions of dollars with Petroleo Brasileiro SA, as the company is formally known, were being searched.
Odebrecht, a major construction firm, said its offices in Rio de Janeiro had been searched and documents seized. It said it was complying fully with the police investigation.
Another construction firm, Mendes Junior, said police officials had been at its offices in Sao Paulo.
(1 US dollar = 2.6049 Brazilian real)
Reporting by Alberto Alerigi and Guillermo Parra-Bernal in Sao Paulo, and Anthony Boadle in Brasilia; Editing by Kieran Murray and Bernadette Baum