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April 5, 2022

Petrobras CEO nominee rejects position ahead of AGM

Company shareholders remain uncertain of Petrobras’ direction after CEO and chair nominees withdraw.

By Matt Farmer

Adriano Pires, the Brazilian Government’s nominee for CEO of Petrobras, has withdrawn from the process. Ahead of the company’s annual general meeting (AGM), shareholders remain unsure of the company’s direction and anticipate further interference from Brazil’s Government.

Recent, Brazilian media has reported possible conflicts of interest for Pires, who then looked to minimise other commitments before assuming the CEO role. Pires was originally due to take the CEO role from 28 March but notified the Brazilian Government of his decision in a letter published on Monday.

In the letter, published on the website of Brazil’s Mines and Energy Ministry, Pires said that he originally “felt confident because [his] vision aligned with the company’s direction at the time”. However, he went on to say that he now believes he “could not reconcile my consulting work with the exercise of Petrobras’ command”. Responding, Minister of Mines and Energy Bento Albuquerque said that he understood Pires reasoning.

The day before this, Clube de Regatas do Flamengo football team president and former petroleum engineer Rodolfo Landim declined the government’s nomination to chair Petrobras’ board. After his team lost the state championship on Saturday, he said: “I have decided to give up this nomination to concentrate all my time on strengthening my team.”

As a result, company shareholders remain uncertain of Petrobras’ leadership ahead of its 13 April AGM. Petrobras has said that it has not yet received information from the government about new nominees.

While markets generally welcomed both previous nominations, the withdrawals signal a new round of unwelcome, potentially political, leadership changes from the Brazilian Government. The country owns 37% of Petrobras but retains more than half of voting rights.

Brazilian President Jair Bolsanaro previously nominated far-right leader and personal friend Joaquim Silva e Luna to the CEO position. After the two disagreed on fuel pricing policy, the president moved to replace him. Bolsanaro faces an election in October, with high inflation and energy prices becoming a key issue.

After the announcement, shares in Petrobras fell by approximately 1%, but later rebounded to remain mostly unchanged across the day.

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