PBR Petroleo Brasileiro ADR

Portuguese police arrested a man in Lisbon in connection with a massive corruption investigation into Brazil's state run oil company Petró leo Brasileiro SA, or Petrobras, Brazilian prosecutors said Monday.

Raul Schmidt Felipe Junior, who has dual citizenship in Brazil and Portugal and was arrested Monday, is being investigated for allegedly paying bribes to former directors of Petrobras, prosecutors, who are working with Portugal's authorities, said in a news release.

Mr. Felipe Junior left Brazil after an arrest warrant was issued for him in July 2015, according to Brazil's prosecutors.

Known as Operation Car Wash, the corruption probe began in March 2014 to investigate allegations of overcharging in contracts signed by Petrobras and some construction companies.

The investigation has ensnared a string of major political and business figures. Prosecutors say crooked suppliers and Petrobras insiders colluded to siphon billions from the company in part to help bankroll the ruling Workers' Party, or PT, and its allies in Congress, allegations the political parties deny.

According to Brazilians prosecutors, Mr. Felipe Junior, who represented international companies seeking exploration contracts from Petrobras, acted as an agent for the payment of bribes to Petrobras officials. Prosecutors didn't identify the international companies.

Representatives for Mr. Felipe Junior weren't immediately available for comment. His lawyer has previously denied his client committed any wrongdoing, according to local media.

Brazilian authorities said they would start extradition proceedings against Mr. Felipe Junior.

Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com

(END) Dow Jones Newswires

March 21, 2016 08:55 ET (12:55 GMT)

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