Brazil's state-run oil company has said it will pay $2.95bn to settle a class action brought by investors in the United States.

Petroleo Brasileiro SA, commonly known as Petrobras, said in a statement on Wednesday that the settlement would bring to an end a legal battle with investors claiming to have suffered losses as a result of a region-wide corruption scandal involving the oil giant.

The company has been embroiled in the scandal for several years since an investigation dubbed Operation Car Wash uncovered that a number of companies were paying bribes to officials to secure contracts with Petrobras, and Brazilian construction giants Odebrecht and OAS.

Petrobras said that the agreement "does not constitute any admission of wrongdoing or misconduct" by the company, which claims also to have suffered from the corruption scheme.

The oil giant proposed to pay the settlement in three instalments. The decision will need to be approved by a US judge.

The settlement was lower than analysts predicted but, if approved, will be one of the largest securities class action settlements in the US.

Petrobras and politics

Since the scandal broke in 2014, dozens of senior politicians and high-ranking businessmen have been removed from their positions.

In 2016, millions of Brazilians took to the streets to demand the removal and impeachment of then President Dilma Rousseff and her predecessor Luiz Inacio "Lula” da Silva.

The two Workers Party politicians were charged with racketeering for allegedly plotting to skim funds from Petrobras, despite no evidence linking Rousseff to the oil giant.

Rousseff and others have speculated that her impeachment was politically motivated as she refused to stop Operation Car Wash or protect politicians from being investigated.

Lula remains Brazil’s most popular politician and the favourite to win the presidency in the general elections in 2018.

A Brazilian court will decide on Lula’s appeal against his corruption conviction on January 24.

If denied, he may be barred from politics and unable to reclaim the presidency.

Agencies