Brazil’s state-controlled oil giant Petrobras will continue selling fuel in line with international prices, incoming chief executive officer Jean Paul Prates said on Wednesday.
(Bloomberg) — Brazil’s state-controlled oil giant Petrobras will continue selling fuel in line with international prices, incoming chief executive officer Jean Paul Prates said on Wednesday.
His comments came as a relief to investors who are concerned that Petrobras will take on expensive fuel subsidies under President Luiz Inacio Lula da Silva. Shares reversed losses and rose as much as 5.6% on the news.
Speaking to reporters in Brasilia, Prates said Petrobras would revise the way it calculates the need for price adjustments, but that they will remain in line with global prices, adding that there wouldn’t be any direct government intervention in setting them.
Prates, a senator, is advancing in his quest to become Petrobras’s next chief executive officer. On Tuesday the government officially appointed him to Petrobras’s board of directors, a necessary step to taking over as CEO. Then on Wednesday Caio Mario Paes de Andrade formally resigned from the post to take a job with Sao Paulo state’s new government.
Andrade’s resignation allows the company’s current board, where a majority of members were appointed by ex-President Jair Bolsonaro administration, to choose a CEO without holding a shareholders meeting. The only step required is for Prates to be cleared by internal Petrobras committees, which could take weeks. Chief Production Development Officer Joao Henrique Rittershaussen will serve as interim CEO in the meantime, according to a filing.
The government is also expected to name new representatives to the board of directors, which will then have to be approved at a shareholders meeting. Itau expects changes to the board to be completed by the end of February.
Under President Luiz Inacio Lula da Silva, Petroleo Brasileiro SA is poised to reverse years of investor-friendly cost cuts and boost spending on refining and renewable energy, a concern for investors who have been receiving record dividends.
Read more: Petrobras investors balk as Lula makes a populist strategy shift
(Updates with comments from Prates on fuel prices)
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