Petrobras names interim CEO, boardroom tense

Brazil's state-controlled Petrobras named an interim chief executive at an extraordinary shareholders meeting yesterday, postponing the confirmation of President Jair Bolsonaro's controversial appointee, former army general Joaquim Silva e Luna.

The new interim chief executive is Carlos Alberto Pereira de Oliveira, the upstream director who had earlier declined to stay on along with other senior company executives when Bolsonaro abruptly announced his appointee in February, ending the two-year tenure of technocratic chief executive Roberto Castello Branco.

The move is another sign of internal discord at the top echelons of Petrobras since Bolsonaro moved to overhaul management. The company is controlled by the federal government in a public-private model designed to maintain corporate autonomy.

Silva e Luna was one of eight members elected to Petrobras' board of directors last night, but his investiture as chief executive, and the appointment of a new senior executive management team including Pereira de Oliveira and three others, now seem to be in limbo.

After the meeting, Petrobras issued a statement thanking Castello Branco for his "key role in deleveraging the company, improving capital allocation, with a focus on investments in world-class assets, and accelerating divestments of non-priority assets."

Since taking over in 2019, Castello Branco laid the groundwork for refinery divestments seen as key to cutting debt and focusing on pre-salt oil development. The first of the refineries is supposed to be sold shortly.

Yesterday's tense meeting fulfilled its official agenda of formally removing Castello Branco and electing a new board of directors. But an administrative dispute over the legality of the meeting itself now threatens to drag out the managerial transition for weeks.

New independent board member Marcelo Gasparino da Silva, who represents minority shareholders, claimed the voting instruction in the meeting convocation was flawed and that he would resign once the new chief executive is installed. His resignation could trigger a new voting process for the eight board members confirmed last night.

The company's statutes required that the eight members of Petrobras' 11-member board had to be elected anew after they were voted in alongside Castello Branco.

Pump pressure

Facing political pressure over rising fuel prices, Bolsonaro shocked financial markets with his 19 February nomination of Silva e Luna, a one-time defense minister with no formal oil sector experience.

Both Bolsonaro and Silva e Luna have signaled support for more predictability at the pump, in tune with the demands of truck drivers who threatened to strike over diesel price volatility last year.

The government is working on proposals that would mitigate fuel price volatility, but no formal plan has been presented. Petrobras adopted import-parity pricing in 2016.

By Nathan Walters