Mariana Durao and Peter Millard, Bloomberg News

RIO
EnergiesNet.com 04 12 2024

A court suspended Petroleo Brasileiro SA’s government-appointed chairman for alleged conflicts of interest, a new twist in a leadership struggle that has consumed the company for weeks.

Pietro Mendes was removed from his position by a court in São Paulo, according to a ruling released Thursday on a complaint filed by a state lawmaker. Mendes’s position as the secretary of oil and gas in Brazil’s Mines and Energy Ministry could influence his decisions at Petrobras, the court said. Petrobras vowed in a statement to appeal the ruling.

Mendes was appointed by Mines and Energy Minister Alexandre Silveira, who’s been in a tug of war with Petrobras Chief Executive Officer Jean Paul Prates over whether the company should invest cash in new projects or return it to shareholders. The Brazilian government controls the board, and President Luiz Inacio Lula da Silva has been consulting with his cabinet over whether to replace Prates or Mendes.

Mendes’s role “makes him a holder of strategic information and a proposer of public policies that are directly related to the activities carried out by the company, attracting a conflict of interest,” the court said.

If the court decision holds, the government would probably need to find a replacement for Mendes ahead of an April 25 shareholders meeting to elect a new board, further complicating the leadership debate.

bloomberg.com 04 11 2024