Brazil's Troubled Oil Giant Gets New Leader -- WSJ
May 20 2016 - 3:03AM
Dow Jones News
By Rogerio Jelmayer and Luciana Magalhaes
SÃO PAULO -- Brazil's acting president, Michel Temer, appointed
a new head of the country's state oil company Petróleo Brasileiro
SA as part of a broad shuffle of top government jobs.
Pedro Parente, formerly the top executive at the Brazilian unit
of U.S. agribusiness giant Bunge Ltd. and currently chairman of
stock-market operator BM&FBovespa SA, will take over the helm
of a company that is at the center of a massive corruption scandal
that has shaken the foundations of the country's political
class.
At Petrobras, Mr. Parente's most urgent tasks will be to restore
confidence in the company and repair its finances after it was
forced to write off billions of dollars in alleged bribe payments
and overbilled projects.
Mr. Parente, who also served on the board of Petrobras from 1999
to 2003, succeeds Aldemir Bendine, who arrived at the company 15
months ago following a stint as CEO of state-controlled Banco do
Brasil SA.
Belligerent unions have hindered the company's effort to cut
costs, while low global oil prices have depressed prices for assets
Petrobras has put on the block and slowed Mr. Bendine's progress in
a crucial divestment program.
Of $15 billion that Petrobras hopes to raise in 2015 and 2016 by
selling assets, the company has so far managed to raise only about
$2 billion.
Mr. Bendine won some plaudits for his early work at Petrobras.
When he arrived at the company last year, Petrobras' situation was
so bad that its auditors were refusing to sign off on its financial
statements due to the corruption investigation.
Guilherme Figueiredo, a money manager at M. Safra & Co. in
São Paulo, said Mr. Bendine "did a good job in an emergency,
cleaning up the company's balance sheet." But he struggled to move
the company forward due to his lack of experience in the oil
sector, Mr. Figueiredo added.
In addition to the corporate experience he gained during his
stint at Bunge, which he left in 2014, Mr. Parente brings a range
of government experience to the job. Under the center-right
government of former Brazilian President Fernando Henrique Cardoso,
Mr. Parente served as chief of staff and deputy finance
minister.
With Mr. Parente in charge, Mr. Figueiredo said that he will
consider buying shares in Petrobras again. M. Safra & Co.
manages about 4 billion reais ($1.12 billion) in assets and sold
all its holdings in Petrobras several years ago, Mr.
Figueiredo.
"He has a good idea of how the public machinery works, that's
very positive, and he knows the other side too because he worked in
the private sector," Mr. Figueiredo said.
Others say it is still too early to guess what changes Mr.
Parente might make at the company, or if he will be an improvement
over Mr. Bendine. And expectations for incoming Petrobras chiefs
have sometimes proved overblown.
Mr. Bendine's predecessor, Maria das Graças Silva Foster, was
highly regarded in the oil industry for her vast technical
knowledge, decades of experience at Petrobras and close
relationship with President Dilma Rousseff, who stepped aside last
week after the senate voted to proceed with an impeachment
trial.
But Ms. Foster failed to improve the company's financial
situation because she wasn't permitted to pass high international
fuel prices on to consumers at a time when Brazil's government was
battling inflation. So Petrobras burned billions of dollars
subsidizing gasoline and diesel imports.
"Whenever there's a change, there's an expectation of an
improvement, but in this case you can't be sure unless you know
Michel Temer's plans for Petrobras," said John Forman, a longtime
Brazilian oil consultant and former director of Brazil's National
Petroleum Agency. "Temer took office a few days ago and right now
he has a lot more problems than solutions."
In televised remarks after his appointment, Mr. Parente said the
acting president had given him a clear remit to change the culture
at Petrobras. "There will be no political appointments inside
Petrobras," Mr. Parente said, referring to a practice that has long
allowed the government to meddle in Petrobras' affairs and at times
fueled corruption. "That was a clear request from Michel Temer.
That will make my life easier and the board's as well."
--Paul Kiernan contributed to this article.
Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com and
Luciana Magalhaes at Luciana.Magalhaes@dowjones.com
(END) Dow Jones Newswires
May 20, 2016 02:48 ET (06:48 GMT)
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