MercoPress. South Atlantic News Agency

Petrobras' shares plummet after Prates' departure from CEO post

Prates said he was happy having averted full privatization rumors shadowing Petrobras

Brazilian President Luiz Inácio Lula da Silva's decision to have Jean-Paul Prates removed as CEO of the State-run oil company Petrobras resulted in shares dropping more than 8% at the Sao Paulo Stock Exchange on Wednesday. Ordinary shares (PETR3) fell 8.36% while preferred shares (PETR4) went down 6.75%, it was reported. In addition, Petrobras' ADRs (American Depositary Receipt) in New York were down around 7.5% on Wednesday.

Following Lula's instructions, Prates submitted a note to Petrobras' board to discuss an early termination of his mandate “in a negotiated manner” after taking over as company CEO in January 2023 following Lula's third presidential inauguration.

Last month Mines and Energy Minister Alexandre Silveira downplayed rumors of divergent public positions between Prates and Lula, whose dissatisfaction became evident when Petrobras announced substantial profits but decided not to distribute extraordinary dividends, leading to a significant stock market decline. In the President's mind, these profits should benefit the Brazilian people rather than just the company’s shareholders.

Petrobras, which recently celebrated its 70th anniversary, boasts a daily production of 3.1 million barrels, record profits, 56 platforms, reserves of 10 trillion barrels, and a workforce of 45,000 employees.

Upon leaving the Petrobras headquarters in Rio de Janeiro por the last time on Wednesday, Prates admitted he was saddened by how things turned out. He was applauded on his way out. Regarding his future within Lula's Workers' Party (PT), the former Senator admitted that “I don't know, we'll see.”

“People are happy, thrilled to be working for the company. We held competitions, increased the workforce, eliminated that bad atmosphere of selling everything, with uncertainties about the future,” he also said. “I'm not rich, nor have I become rich,” he added.

Prates decided not to run for governor of the State of Rio Grande do Norte in 2022 to join Lula's presidential campaign.