Two more government nominees to the board of Brazil's state-controlled Petrobras are further allaying investor worries over political meddling that could derail the company's pre-salt focus and divestment plans.
Brazil's mines and energy ministry has tapped former Total executive Cynthia Santana Silveira and administrative executive Ana Silvia Corso Matte, joining six other government nominees.
The nominees are deemed to have a technical profile with industry experience, in contrast to former army general Joaquim Luna e Silva whom Brazil's president Jair Bolsonaro nominated as chief executive on 19 February.
The technical qualifications of the government's non-military nominations, including one named by the economy ministry, should sustain the company's strategy at least through the end of 2022 when Brazil will hold new general elections, a local senior oil industry executive tells Argus.
Brazil's elections have gained new relevance after a supreme court justice deemed on 8 March that the Curitiba court that convicted former president Luiz Ignacio Lula da Silva for corruption in 2017 had no jurisdiction over the case, paving the way for the still-popular Workers' Party leader to challenge Bolsonaro for re-election next year. The full court has yet to rule on the case.
The closely watched overhaul of the oil company's 11-member board coincides with the looming departure of technocratic chief executive Roberto Castello Branco. Until Bolsonaro stunned the market with his Friday night nomination to replace him with a military appointee, the contracts of Castello Branco and other company executives had been expected to be renewed. The controversial move prompted several board members to turn down government requests to accept another term, sowing industry fears that the company would be forced to scrap market-based fuel pricing that is critical to its refinery sales. It is still unclear if executive board members including trading head André Barreto Chiarini and chief financial officer Andrea Marques de Almeida will remain.
An extraordinary shareholders meeting to consider the nominations for chief executive and board seats is unlikely to take place before April.
Petrobras says the meeting has not been scheduled and can only happen at the earliest 30 days after it is formally convened in writing, which has not happened yet.
In addition to the government's re-nomination of Petrobras board chair Eduardo Bacellar Leal Ferreira — who also hails from the military — and seven board members, minority shareholders have re-nominated lawyer Leonardo Pietro Antonelli, Petrobras said yesterday.
The board structure includes the chief executive. Two minority board members are not up for re-election.
