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May 24, 2022

Brazilian president disposes of Petrobras CEO – again

The Brazilian president has disposed of the company’s third CEO in two years.

By Matt Farmer

Jair Bolsonaro, the president of Brazil, has effectively fired the third CEO of state-owned oil company Petrobras within two years.

Current CEO José Mauro Coelho took office in April, following a vote at the company’s annual general meeting. The energy analyst and professor previously served at the Brazilian Ministry of Mines and Energy, winning the favour of the president. He has currently held office for approximately 40 days.

A letter from the Ministry of Mines and Energy, published late on Monday, commanded the company to call an extraordinary general meeting to change CEO, without giving the reasoning behind the decision. The ministry also called for a total replacement of the company’s board of directors.

The Brazilian Government now wants current government secretary Caio Mário Paes de Andrade at the head of the company. Andrade works at the Brazilian Ministry of the Economy, having previously acted as CEO of state-owned IT service company SERPRO. He has also founded a start-up incubation company but has no experience in oil and gas.

Bolsonaro faces elections in October, and opinion polls currently suggest Bolsonaro’s party holds significantly less support than his opposition. Rising fuel prices have contributed to increasing dislike of the sitting president, attracting political criticism. As with previous price rises, the president has defaulted to firing Petrobras’ CEO.

Coelho succeeded military general Joaquim Silva e Luna as CEO, after he was fired in April. Bolsonaro’s first choice of replacement, energy consultant Adriano Pires, turned down the appointment after reports of potential conflicts of interest. Second choice football club owner and former petroleum engineer Rodolfo Landim also rejected the nomination to “focus on [his] team” after they lost a high-profile match.

The military general, a personal friend of Bolsonaro, became CEO of Petrobras after the president fired economist Roberto Castello Branco. Despite being ordered out in September 2020, Branco held on until February 2021, when Petrobras increased the fees charged by its refineries. This led to an approximate 10%-15% increase in consumer fuel costs. The board of Petrobras arranged an extraordinary meeting the following day, which resulted in Branco’s replacement.

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