Free Press Journal

Scam-hit Brazilian oil major names new CEO


Sao Paulo: Scandal-hit Brazilian state-controlled oil company Petrobras has named the chief executive of state-run bank Banco do Brasil as its new CEO.

Petrobras, which made the announcement Friday in a securities filing, said its board of directors selected Aldemir Bendine to succeed Maria das Gracas Silva Foster, who resigned Wednesday amid a deepening crisis at the company.

Bendine had served as CEO of Banco do Brasil since 2009, when then Brazilian president Luiz Inacio Lula da Silva recommended him for that post.

The board of directors also named Banco do Brasil chief financial officer Ivan de Souza Monteiro to replace Almir Barbassa as Petrobras’s new CFO.

Four other senior Petrobras executives who resigned this week along with Foster and Barbassa were replaced on an interim basis by subordinates within their respective divisions.

The new interim heads of exploration and production and of refining are Solange da Silva Guedes and Jorge Celestino Ramos, respectively, while Hugo Repsold Junior is the new gas and energy chief and Roberto Moro was named to head the engineering division.

The market reacted negatively to the appointments, with Petrobras’s share price plunging more than 7 percent after the media began unveiling the names of the new top executives.

Foster resigned Wednesday due to a massive corruption scandal that erupted last March and has led so far to the detention of three former Petrobras directors along with executives of leading Brazilian construction and engineering firms.

Prosecutors allege that those latter firms formed a cartel to artificially drive up the price of contracts with Petrobras.

As part of that scheme, the companies paid kickbacks to some Petrobras executives — although Foster and the other executives who resigned this week have not been implicated in the scandal — and funnelled a portion of the money from the inflated contracts to Brazilian political parties.

The scandal has hampered Petrobras’s ability to raise funds in capital markets and forced it to scale back investment plans for the coming years.

Among other projects, Petrobras was forced to suspend work on two large refineries that were supposed to transform Brazil into an important fuel exporter in the coming years.

Petrobras, once the largest company in Latin America by market capitalisation, has seen its share price plunge by 58 percent over the past four months.