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By Stephen Eisenhammer
RIO DE JANEIRO (Reuters) - Shares of Brazil's Petrobras (SA:PETR4) plummeted 5 percent on Friday after the state-run oil firm delayed releasing its results amid a police investigation into corruption that has already ensnared a former senior executive.
Hours after the third-quarter earnings delay was announced late Thursday, police arrested 18 people suspected of involvement in a money laundering and bribery scheme centered on Petrobras. They raided Brazilian construction and engineering companies and seized potentially incriminating documents.
Investors are concerned the postponed publication of audited results for the third quarter puts the world's most indebted oil company at risk of a technical default on tens of billions of dollars in bonds.
Analysts warned that the investigation 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.
Petrobras shares opened over an hour and a half after the rest of the Bovespa index (BVSP), with the chief executive of the bourse, Edemir Pinto, saying at an event in Sao Paulo the delay was 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.
A note from Credit Suisse Securities said Petrobras may be barred from accessing bond markets in the United States. The note estimated Petrobras might need to borrow as much as $20 billion (13 billion pounds) 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, compared with 104.5 cents the prior session, amid concerns of a default.
Authorities deployed 300 police officers and 60 tax fraud agents in five states and the capital district. The probe, known as "Operation Car Wash," was first launched in March as police investigated the alleged money laundering scheme.
The continuing fallout of the scandal has put pressure on leftist President Dilma Rousseff, who won a narrow re-election last month.
A former Petrobras executive previously jailed in the case has said in a plea bargain deal that kickbacks from contracts were funneled to Rousseff's Worker's Party and its allies in Congress.
At a news conference, the police said seven companies that had contracts worth billions of dollars with Petroleo Brasileiro SA, as the company is formally known, were being searched.
Odebrecht, a large private Brazilian construction firm, said in a statement its offices in Rio de Janeiro had been searched and documents seized. The company said it complied fully with the police investigation.
(Reporting by Alberto Alerigi and Guillermo Parra-Bernal in Sao Paulo, and Anthony Boadle in Brasilia; Editing by Brian Winter and Bernadette Baum)