Brazil Government Announces Petrobras Chief Dismissed

Brasília, (APP - UrduPoint / Pakistan Point News - 15th May, 2024) The government of Brazilian President Luiz Inacio Lula da Silva announced Tuesday that the CEO of state oil company Petrobras has been sacked.

The move follows a recent spat between Petrobras and shareholders over dividend payments, which heightened concerns about the government's influence in the publicly traded company's decision-making.

Jean Paul Prates, a former state senator and ally of Lula, "has been dismissed," a presidential spokesman said Tuesday evening.

A lawyer and economist, Prates was appointed last January by the Petrobras board of directors soon after leftist Lula was sworn in for a third term. He previously held office from 2003-2011.

Prates previously served as a senator in the state of Rio Grande do Norte and was a member of Lula's Workers' Party.

When nominating him for the job, Lula described Prates as a specialist in the energy sector with 30 years experience in the oil, natural gas, biofuels and renewable energy sectors.

But the 55-year-old has faced fierce criticism in recent months after Petrobras announced it would not pay an extraordinary dividend to investors following its second-highest net profit ever last year.

The March announcement caused the company's share price to plummet and was seen by some analysts and opponents as direct government intervention.

Lula has repeatedly accused Petrobras executives of thinking only of satisfying the group's shareholders, to the detriment of consumers.

Prates at the time said on X that it was "legitimate" for the board to take a position "guided by the President" and his ministers.

"That is exactly what happened" in relation to the dividend decision, he added.

The Petrobras board eventually approved the dividend payment in late April.

The company confirmed in a statement Tuesday it had received a request for the board to meet on the early termination of Prates's mandate.

Just over half of Petrobras's capital is held by the Brazilian state, and the rest by private shareholders.

The firm previously experienced a turbulent period during the four-year term of Lula's predecessor, far-right president Jair Bolsonaro, who voiced strong opposition to the company's pricing policies.

During that time, the company saw four CEOs succeed one another in rapid succession.

The Brazilian government has not mentioned who may replace Prates, while local media have mentioned that a possible favorite may be Magda Chambriard, the former head of Brazil's oil industry regulator.