Petrobras outgoing CEO vows smooth transition

The outgoing chief executive of Brazil's state-controlled Petrobras is vowing a smooth transition to his controversial successor, but he acknowledged concerns among bidders for the company's assets earmarked for sale.

On an earnings call today, Roberto Castello Branco said the company's operations would remain on course through the end of his tenure on 20 March, when President Jair Bolsonaro's nominee — former army general Joaquim Silva e Luna — is scheduled to take over.

The Petrobras board has been pushing back against the managerial overhaul that would put an inexperienced political appointee at the helm of the strategic company. And securities regulator CVM is investigating whether Bolsonaro's 19 February announcement of the sudden change breached disclosure rules.

But Castello Branco signaled today that he has thrown in the towel. "I don't know how the transition will be implemented. The only thing I strongly believe is that it should be very open, very transparent, and I will try to help make the transition very smooth and productive," he said.

The University of Chicago-trained economist said he was aware of no changes to Petrobras' divestment program. "Of course, some of the bidders were concerned about the recent events, but they did not show any sign that they are going to leave the process. I hope they maintain the same position."

Petrobras is selling eight refineries that make up the bulk of $25bn-$35bn in expected revenue from asset sales. The first refinery -- 333,000 b/d Landulpho Alves (RLAM) -- already has a $1.6bn offer from Abu Dhabi's investment fund Mubadala. In its own earnings call today, Brazilian energy conglomerate Ultrapar reaffirmed its interest in acquiring the 201,000 b/d Alberto Pasqualini refinery (Refap) in Rio Grande do Sul state.

Castello Branco was careful to state that Petrobras would maintain its import parity pricing for fuel. The market-based pricing policy is critical for investors, but it has also sparked a backlash among Bolsonaro's grassroots supporters.

"I haven't had the opportunity to meet my successor, but I'm open to engaging in an open discussion to make my very frank comments about the company and the challenges," he said.

Unexpectedly nominated by Bolsonaro on 19 February, former defense minister Silva e Luna faces questions over his qualifications for the role. The company's board has said it is vetting the nominee, who currently heads cross-border hydroelectricity company Itaipu, to ensure his experience satisfies technical competency requirements, but the firm is unlikely to cross swords with Bolsonaro.

"We do have technical criteria, even for me I had to prove I had 10 years of finance experience reporting to the CFO of another company. This is a technical criteria needed for executives and board members," Petrobras chief financial officer Andrea Almeida said on the call.

By Nathan Walters