MercoPress. South Atlantic News Agency

Lula orders major reshuffle at Petrobras' helm

In 1Q of 2024, Petrobras' profits shrank 23% from last year's 4Q

President Luiz Inácio Lula da Silva has ordered a reshuffle at the top of Brazil's state-run oil company Petrobras, with Magda Chambriard replacing Jean-Paul Prates as CEO, Agencia Brasil reported. Following the head of state's decision late Tuesday, the board of directors approved the early termination of Prates' term Wednesday morning. In the meantime, and until Chambriard takes office, Corporate Affairs Executive Director Clarice Coppetti has been appointed on an interim basis.

Petrobras is open to private investors buying stock but is nonetheless managed by the government of South America's largest country. Hence, the Mines and Energy Ministry nominated Chambriard for the top position but her appointment still needs vetting from the Board and the subsequent approval by a Shareholders' Convention.

Chambriard is a chemical and civil engineer who began her career at Petrobras in 1980, after which she was transferred to the National Petroleum, Natural Gas and Biofuels Agency (ANP) in 2002. She served as ANP's general director between 2012 and 2016 under then-president Dilma Rousseff.

The Board of Directors also sacked Financial and Investor Relations Director Sergio Caetano Leite, who was said to be close to Prates, and appointed current Executive Finance Manager Carlos Alberto Rechelo Neto in his place on an interim basis.

Earlier this week, Petrobras announced net profits of R$ 23.7 billion (US$ 4.61 million) in the first quarter of 2024, a 23% drop from the last quarter of 2023. The company claimed the performance was due to a currency devaluation coupled with lower sales of oil and byproducts, “something common in the first quarter of the year when there is less demand for diesel, as well as the reduction in the price of oil and the diesel margin.”

According to Leite, the devaluation did impact the financial statements but did not affect the company's cash flow, while Prates pledged to maintain the planned investments and generate value for shareholders. In the end, their explanations were not enough for Lula.