Brazil's Petrobras gets new boss with same old problems

Brazil's Petrobras gets new boss with same old problems
By Euronews
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Pedro Parente, the new boss of Brazil's scandal-ridden state-controlled energy firm Petrobras, has been talking about the challenges ahead.


The new boss of Brazil’s scandal-ridden state-controlled energy firm Petrobras has been talking about the challenges ahead.

Pedro Parente was appointed by interim President Michel Temer as his government tries to kick-start Brazil’s shrinking economy and shore up the debt-laden oil producer.

The engineer and former energy minister said he understands his responsibilities and the need for good governance and a strictly professional management.

With regard to who will run the company – the directors – he said: “We’ll have to see what the demands of the company are for those functions, while always keeping in mind the interests of the company.”

Turnaround challenge

His job is to turnaround the loss-making energy giant which is mired in a financial crisis due to low oil prices, crippling debt and a massive corruption scandal.

Parente stressed his independence: “There are not going to be any political appointments. If there were to be any attempts to put anyone on the board for political reasons – and I don’t think there will be – then we would not accept that.”

The appointment marks Parente’s return to Petrobras after 14 years. As a board member he was a key player in opening the company to competition and international investment after then President Fernando Henrique Cardoso’s administration ended Petrobras’ monopoly over exploration and production in 1997.

Investors are more likely to have confidence in Parente because as energy minister he managed a severe energy crisis that required electricity rationing and the quick building of supplementary power stations and also helped manage a reduction of the government’s stake in Petrobras.

Cardoso’s successor Luiz Inácio Lula da Silva reversed that privatisation restoring much state control of the company.

Rousseff’s role

The corruption scandal at Petrobras – involving price-fixing, bribery and secret payments to politicians – was key to public anger and the impeachment of President Dilma Rousseff.

She was chairman of the company between 2003 and 2010. She has not been accused of any crimes, but under her watch Petrobras borrowed heavily, making it the world’s most indebted oil firm.

At the same time the company struggled to increase domestic oil production as much as expected, missing annual targets for 12 straight years.

Petrobras raises $6.75 billion in return to global debt markets

— Reuters Business (@ReutersBiz) May 17, 2016

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