Latest market news

Petrobras CEO steps down suddenly: Update 2

  • Market: Crude oil, Natural gas
  • 01/06/18

Includes naming interim CEO, more reaction.

Pedro Parente has resigned as chief executive of Brazil's state-controlled oil company Petrobras, a high-profile exit that could portend a coming upheaval in Brazil's recovering oil and gas sector.

The seasoned executive took the position in May 2016 on a guarantee from then-interim President Michel Temer that the government would stay out of the company's decision-making. In his tenure, which was expected to continue into 2019, Parente has pulled Petrobras back from the brink of collapse and helped reshape the firm as a leaner, more independent oil company.

But a crippling truck driver strike that started on 21 May and is only now ending forced Parente to make successive concessions to the government, resulting in a diesel price subsidy policy that threatens to eliminate the market-based pricing policy he implemented. The trucker strike and an abbreviated oil workers strike this week were held, in part, to protest Parente's plans to sell billions of dollars in Petrobras assets.

"[I]t is clear that my stay in the presidency of Petrobras is no longer positive and contributes to the construction of the alternatives that the government is facing," Parente said in a letter to Temer that was released publicly.

In an emergency session this afternoon, Petrobras' board of directors selected the company's chief financial officer Ivan Monteiro as interim chief executive. A former executive with Brazil's state-owned Banco do Brasil, Monteiro took over as chief financial officer in 2015. He joined the company along with former chief executive Aldemir Bendine, who was replaced by Parente and is currently jailed after being convicted of corruption involving disgrace Brazilian conglomerate Odebrecht.

Monteiro has been key in Petrobras' push to rein in its debt and is highly regarded by the market. He is expected to continue to defend the company's market-based pricing policy and should help ensure continuity in the company's investment and divestment programs.

Brazilian government officials tried to downplay the impact of Parente's resignation.

Marcio Felix, executive secretary of Brazil's mines and energy, told reporters the government did not pressure Parente about the pricing policy during the truck driver strike, saying it is working on proposals to ease consumer prices without abandoning Petrobras' pricing policy. This could include flexible fuel taxes which could be implemented by year-end.

"It's important we reaffirm the commitment of the government and the mines and energy ministry to not interfere with Petrobras' pricing policy," Felix said.

Oil regulator ANP said there was no change to plans for next week's pre-salt bid round, where Petrobras has already exercised preferential rights for three of the four blocks on offer.

A senior ministry and mines official tells Argus Parente's exit will have no impact on ongoing inter-ministerial negotiations for the pre-salt cluster known as the transfer of rights region nor on next week's pre-salt bid round.

Parente's departure — considered a strong indication of the government's plans to further intervene in the fuel industry — could hamper Petrobras' plans to unload 60pc stakes in four domestic refineries.

The news of Parente's exit was greeted with mixed signals across Brazil's political spectrum. While most parties left of center and even some on the right celebrated Parente's departure, more pro-market politicians lamented the decision and what it means for Brazil's fragile economic recovery.

Brazil's minority opposition Workers' Party (PT), whose labor union base claims credit for the resignation, said Parente's exit was not enough and that the government needs to make radical revisions to the company's pro-market policies.


Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News

Citgo auction result delayed amid last-minute motions


18/09/24
News
18/09/24

Citgo auction result delayed amid last-minute motions

Houston, 18 September (Argus) — The US court-appointed special master overseeing the auction of US refiner Citgo plans to object to a last-minute motion from the Venezuelan government to delay the sale process by four months. The Republic of Venezuela and state-owned oil company PdV filed a motion on Tuesday seeking a four-month pause in the sale of its refining subsidiary Citgo, which is being auctioned off to satisfy debts owed by PdV. Special master Robert Pincus said in a court filing today that he intends to object to Venezuela's motion for a pause. The last-minute motion from Venezuela comes days after the US District Court for the District of Delaware was expected to announce results of the winning bidder. The court asked for a second extension to the auction process in August, delaying announcing a successful bidder to on or about 16 September with a sale hearing on 7 November. But Pincus is now dealing with last-minute legal challenges filed last week outside of the Delaware courts by so-called "alter ego" claimants seeking to "circumvent" the Delaware court's sales process and "jump the line" for enforcing claims against PdV, the special master said in a filing last week. Bidders for Citgo's 804,000 b/d of refining capacity, terminals, retail fuel stations and other plants expect the assets to be sold free and clear of future claims by PdV creditors. Unresolved legal liabilities could lower the value bidders are willing to pay for Citgo, decreasing the pool of money available to those owed by PdV. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

US seeks to purchase 6mn bl for SPR


18/09/24
News
18/09/24

US seeks to purchase 6mn bl for SPR

Washington, 18 September (Argus) — President Joe Biden's administration is trying to purchase 6mn bl of sour crude for delivery to the US Strategic Petroleum Reserve (SPR) as part of a plan to issue solicitations when prices are "favorable for taxpayers." The US Department of Energy (DOE) today released a solicitation to purchase up to 6mn bl of sour crude for delivery in February-May to the SPR's Bayou Choctaw site in Louisiana. If the purchase is successful, it would be the largest single purchase since the Biden administration launched its crude purchase program in early 2023. The solicitation offers a chance for the administration to buy crude for the SPR at a lower price than earlier purchases. Nymex WTI crude futures for delivery in February settled at $68.41/bl on Tuesday. The lowest-priced crude purchase under Biden was a 1.7mn purchase at a price of $72/bl in June 2023, and the average purchase price is about $76/bl. Bids for the solicitation are due by noon ET on 25 September. DOE has already purchased more than 50mn bl of sour crude for the SPR, of which 30mn bl have already been delivered. On 9 September, DOE said it purchased 3.42mn bl of sour crude for the SPR's Bryan Mound storage site at a price of $72.46/bl from the trading firm Macquarie Commodities Trading. The crude will be delivered in January-March, adding to an earlier purchase of nearly 2.5mn bl that will be delivered to the Bryan Mound site over the same time frame. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

US Fed cuts rate by half point, signals more to come


18/09/24
News
18/09/24

US Fed cuts rate by half point, signals more to come

Houston, 18 September (Argus) — The US Federal Reserve cut its target interest rate by 50 basis points today, the first rate cut since 2020, with officials signaling they expect to make another half point worth of cuts by the end of 2024. The Fed's Federal Open Market Committee (FOMC) lowered the federal funds rate to 4.75-5pc from the prior range of 5.25-5.5pc, which was a two-decade high. The Fed had kept the target rate unchanged since July 2023 after hiking it for more than a year in the most aggressive increase campaign in four decades to quash inflation, which peaked at 9.1pc in mid-2022. "The committee has gained greater confidence that inflation is moving sustainably toward 2pc and judges that the risks to achieving its employment and inflation goals are roughly in balance," the FOMC said in its statement after the two-day meeting. "Job gains have slowed, and the unemployment rate has moved up but remains low." The Fed board and policymakers, in their latest economic projections, expect the target rate range will end 2024 near a midpoint of 4.4pc compared with an end of year midpoint of 5.1pc projected in June, which implies further cuts amounting to 50 basis points by the end of 2024. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Dutch government eyes gas storage levy from 2026


18/09/24
News
18/09/24

Dutch government eyes gas storage levy from 2026

London, 18 September (Argus) — The Dutch government has proposed a new levy from 2026 to recoup the cost of filling the Bergermeer gas storage facility since 2022 in its 2025 budget plan. The government's draft budget presented on Tuesday said that preparations were ongoing to introduce a levy on booked capacity on top of gas system operator GTS' transport tariffs. The levy would apply to both domestic users and "users abroad" to ensure that "the costs associated with the gas storage filling measures are borne by the users who benefit from the filling of storages", the government said. The levy is expected to generate €146.7mn/yr ($163mn/yr) from 2026 until at least 2029, according to the draft budget. That phrasing suggests that the levy may not take effect before 2026. The government tasked state-owned holding company EBN with filling Bergermeer to 90pc of capacity in summer 2022 if market participants failed to do so, and has left that legal requirement in place until 2025. And the Dutch government's draft budget earmarks more money for the stockbuild in coming years, amounting to about €256mn for 2025 and €233mn for 2026, up from €67mn in 2023 and €105mn in 2024. The Hague's new coalition government has focussed on gas security of supply, proposing further steps to support domestic production and ensure that storages are filled. As part of this, it intends to propose legislation to prevent and react to an energy supply crisis, while aiming to reduce demand, maintain LNG capacity and focus on long-term contracts, the government said. The government also plans to amend the mining act, the gas act and other existing laws to "structurally safeguard the security of gas supply", it said. In its government programme released on Friday , the cabinet said it was examining how the government could more proactively ensure the gas stockfill. All the country's storage sites remain "crucial for guaranteeing security of supply and realising energy independence", the budget said. This includes the country's largest storage site at Norg, where the government compensates operator Nam — a 50:50 joint venture between Shell and ExxonMobil — to use the facility to ensure security of supply . The government has paid Nam €491mn for that this year, down from €757mn a year earlier, because of lower gas prices, the budget shows. The German government implemented a similar storage levy in 2022 to recoup the cost of filling storage sites ahead of the winter heating season. But after EU pressure from central and eastern European neighbours regarding the large negative impacts of the levy on their effort to diversify away from Russian gas, the German government decided to stop charging the levy on outbound flows from the beginning of next year. By Lucas Waelbroeck Boix and Till Stehr Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Generic Hero Banner

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more