Brazilian government’s pick for Petrobras CEO withdraws By Reuters

© Reuters. FILE PHOTO: The emblem of Brazil’s state-run Petrobras oil firm is seen at its headquarters in Rio de Janeiro, Brazil October 16, 2019. REUTERS/Sergio Moraes/File Photograph

By Rodrigo Viga Gaier and Gabriel Araujo

RIO DE JANEIRO (Reuters) -Power guide Adriano Pires has backed out of the Brazilian government’s nomination for him to take the helm at Petrobras, the nation’s Mines and Power Ministry mentioned on Monday, within the newest blow to succession plans on the state-run oil firm.

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“It was clear to me that I couldn’t reconcile my consulting work with the train of Petrobras’ command,” Pires wrote in a letter revealed by the ministry on its web site.

Pires’ choice to show down the chief government job got here a day after soccer magnate Rodolfo Landim declined a nomination to chair the board of Petroleo Brasileiro SA, as the corporate is formally recognized.

Pires had been tapped by Brazilian President Jair Bolsonaro to take over as the highest government of Petrobras on March 28, following disagreements between the far-right chief and present CEO Joaquim Silva e Luna over the corporate’s gas pricing coverage.

The federal government will now want to search out appropriate replacements for the 2 high spots at Petrobras simply days earlier than the corporate’s April 13 annual shareholders’ assembly.

Pires’ choice to again out from the CEO job was reported earlier on Monday by Brazil’s O Globo newspaper. Most well-liked shares in Petrobras fell 1% after the O Globo article was revealed, however later recouped their losses.

Pires’ nomination had been going through inner compliance-related hurdles at Petrobras, as his consultancy, Rio de Janeiro-based CBIE, advises firms that do enterprise with Petrobras, two sources with data of the matter had beforehand instructed Reuters.

An inner compliance committee had additionally really useful towards Landim’s changing into the subsequent chairman on conflict-of-interest grounds, mentioned the sources, who requested anonymity to debate personal inner deliberations.

Reached for remark, Landim mentioned that he determined to withdraw from the board nomination in an effort to dedicate all his vitality to Flamengo, the Rio de Janeiro soccer membership he leads.

In a be aware to purchasers, analysts at Brazil’s Itau BBA maintained their “outperform” score on Petrobras shares given what they described as sturdy fundamentals, however mentioned uncertainty on the high would create destructive noise.

“This uncertainty concerning the nominees to the chairman and CEO positions, arising so quickly earlier than the corporate’s subsequent common shareholders’ assembly, will probably set off some volatility within the inventory this week,” the analysts wrote.

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