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- Chairman candidate Mendes and two others considered ineligible
- Investors concerned a new board will loosen governance rules
Mariana Durao and Peter Millard, Bloomberg News
RIO
EnergiesNet.com 04 25 2023
Brazil’s government is planning to elect a chairman and two other members to the board of oil producer Petrobras even though they failed to pass the state-controlled company’s internal audits, according to people familiar with the matter.
The Ministry of Mines and Energy is making sure there aren’t any legal impediments before moving forward with the candidates at an April 27 shareholders meeting, said one of the people, all of whom asked not to be identified discussing government deliberations. Petrobras declined to comment on the candidates; the ministry didn’t immediately respond.
Investors are closely watching the board election and are concerned that the Luiz Inacio Lula da Silva administration will start undermining Petrobras’s internal governance rules to have a freer hand to intervene in its business decisions. Lula has pressured Petrobras to pursue goals that he campaigned on, such as lowering the price of fuel and boosting investments in refining, which isn’t as profitable as producing oil.
The three candidates the government plans to back are: Pietro Mendes, the candidate to be chairman, who was considered ineligible by Petrobras’s current board because of potential conflicts of interests, according to an April 13th filing; and Sergio Rezende and Efrain Pereira da Cruz, who were both found to be ineligible due to recent political ties. A candidate for alternate board member, Renato Galuppo, was also rebuffed by Petrobras.
Mendes is the Mines and Energy Ministry’s secretary of petroleum, natural gas and biofuels. Brazil’s Securities and Exchange Commission also considered Mendes and Rezende ineligible.
The previous administration of Jair Bolsonaro also pushed through board members who had failed to pass internal background checks, at a time when he was pressuring the oil producer to contain fuel inflation.
bloomberg.com 04 24 2023
