Latin America Advisor
Energy Advisor
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Are CEO Shakeups Hurting Business at Brazil’s Petrobras?
Brazil’s president last week tapped Caio Mario Paes de Andrade as CEO of state oil company Petrobras. He is the company’s fourth chief executive in two years. // File Photo: Brazilian Government.
Brazilian President Jair Bolsonaro fired Petrobras CEO José Mauro Ferreira Coelho on May 23 after just 40 days in the position. The dismissal came amid a warning that Brazil is facing a severe diesel shortage. Ferreira Coelho was the third Petrobras CEO in a little over a year to be fired by Bolsonaro amid disagreements over fuel prices. All three of his predecessors were sacked after refusing to continue subsidizing fuel prices, a policy that Bolsonaro has pushed as he seeks re-election in October. Have the changes in leadership hurt Petrobras’ operations and strategic goals, and how have shareholders and markets reacted to the ouster of another CEO? Is Brazil at risk of running out of diesel, and how will the shortage affect transportation, exports and other sectors reliant on the fuel? How likely is Ferreira Coelho’s successor—Caio Mario Paes de Andrade—to bend to Bolsonaro’s will and subsidize fuel prices?
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Anabel Teixeira, associate for Brazil and the Southern Cone at McLarty Associates: “President Bolsonaro has taken several controversial measures over the past year to contain the rapid rise in fuel prices, aggravated by the war in Ukraine. The backdrop to this is the upcoming election, in which the president trails his opponent, former President Lula, by a significant margin. Public pressure on Bolsonaro to contain rising prices, especially by truckers who comprise a significant component of his base, has been increasing. Andrade is the fourth Petrobras CEO in the position during Bolsonaro’s tenure, and his appointment followed Bolsonaro’s replacement of the well-regarded minister of mines and energy, Bento Albuquerque. These personnel moves have damaged the relationship between the executive branch and Petrobras leadership, with shares of the company dropping in reaction to political intervention in its management…”
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A sister publication of the Inter-American Dialogue’s daily Latin America Advisor, the weekly Energy Advisor captures fresh analysis from business leaders and government officials on the most important developments in oil and gas, biofuels, the power sector, renewables, new technologies, and the policy debates shaping the future of energy in the Western Hemisphere and beyond. To subscribe or for more information, contact Erik Brand, publisher of the Advisor, at ebrand@thedialogue.org.
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