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Brazil eyes swap for embattled Petrobras CEO, sources say

Jean Paul Prates  (F. Carter Smith/Bloomberg)
Jean Paul Prates (F. Carter Smith/Bloomberg)

Lisandra Paraguassu and Rodrigo Viga Gaier, Reuters

EnergiesNet.com 04 05 2024

Brazil’s government is weighing names to replace Petrobras CEO Jean Paul Prates in coming days, two government sources told Reuters on Thursday, but two sources close to the CEO of the state-run oil firm said his exit is not a done deal.

Prates has been under friendly fire from parts of Brazil’s governing coalition calling for him to bring down fuel prices and ramp up job-creating investments. Last month, he clashed with members of President Luiz Inacio Lula da Silva’s cabinet over a dividend withheld from Petrobras (PETR4.SA), investors.

Government ministers have reached an agreement to release that extraordinary dividend, newspaper O Globo reported on Thursday, but Prates may not last to see the payout.

CNN Brasil reported on Thursday that the exit of Prates was “imminent,” citing three unnamed sources.

Petrobras shares closed down 1.4%.

No decision has been made regarding dividend distribution, the firm said in a statement after markets closed.

Prates knows he is in trouble, as the campaign for his replacement comes from Lula’s cabinet, said a source close to the CEO. But this is not the first time his exit has seemed inevitable only for the plan to fizzle out, one source noted. Another said a short-term exit is possible but “not likely.”

Adding weight to the reports this time, government sources cited possible substitutes close to Lula’s inner circle.

The head of state development bank BNDES, Aloizio Mercadante, is being considered as a substitute for Prates, said the sources on condition of anonymity. He has the support of Finance Minister Fernando Haddad, who has been backing Prates, one of the sources said.

Another name under consideration is Bruno Moretti, a special secretary at the presidential palace who sits on the board of Petrobras, a government source told Reuters. Moretti is close to Lula’s chief of staff Rui Costa, who has criticized Prates.

Kicking off the speculation on Thursday, newspaper Folha de Sao Paulo reported that Prates was seeking a meeting with Lula to ask for support to stay in the role, but opening the door to an exit if he cannot a strong show of support.

Lula’s press office said in a statement that it was not aware of any scheduled meeting. Petrobras did not respond to requests for comment.

Prates made light of the situation on Thursday afternoon, posting a meme on social platform X saying he will leave Petrobras later on Thursday, but then resume work on Friday.

The Petrobras workers’ union FUP criticized in a statement what it called a “public bashing” of Prates, adding that it recognizes the CEO’s contributions to the state-run firm.

Reporting by Lisandra Paraguassu in Brasilia and Rodrigo Viga Gaier in Rio de Janeiro; Additional reporting by Andre Romani, Gabriel Araujo and Fabio Teixeira; Editing by Brad Haynes, Jason Neely, Nick Zieminski. David Evans and Marguerita Choy

reuters.com 04 04 2024

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