Paes de Andrade does not meet requirements to command Petrobras | Economy

Michel Jesus / Chamber of Deputies

Lack of experience in energy hurts the Law of State-Owned Companies and is an obstacle for Paes de Andrade at Petrobras

The appointment of the fourth president of Petrobras in the government of Jair Bolsonaro risks ending up in court. With no experience in the sector, analysts believe that Caio Paes de Andrade would not fulfill the requirements for commanding the company according to the provisions of the State-owned Companies Law.

The executive’s name must be submitted to the oil company’s People Committee, which may or may not endorse the appointment, and then be analyzed by the company’s Board of Directors. A minority group is already articulating to go to court if he gets approval.

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Article 17 of the State-Owned Companies Law requires a minimum of ten years’ professional experience, in the public or private sector, in the company’s area of ​​activity, or four years holding a management position in a company of similar size, a public position of trust at a higher level (DAS -4) or a teaching or research position in the company’s area of ​​activity.

One paragraph, however, mentions the possibility of experience in a related area, which could serve as an argument for the government.

political use

According to specialists, however, this justification may not be accepted by control bodies, such as the Federal Audit Court, or by the oil company’s own Council. In his resume, Paes de Andrade presents himself as a specialist in mergers and acquisitions, real estate and digital transformation. He studied at Duke University and Harvard.

Paes de Andrade was the name indicated by the Minister of Economy, Paulo Guedes, since the resignation of Joaquim Silva e Luna from the command of the company, at the end of March. His name gained prominence with the implementation of the gov.br digital platform.

Paes de Andrade was Guedes’ Secretary for Debureaucratization and had a good relationship with the Minister of Mines and Energy, Adolfo Sachsida. The appointment marks the increase in Guedes’ influence in the energy sector.

The Petrobras Statute requires the executive board to have at least ten years of leadership experience, preferably in the energy area.

Lawyer Bruno Furiati, a partner at Sampaio Ferraz, says that the council may not even take into account the restrictions when approving the name, but it will need reasoning. And he recalls that counselors can respond in court for the decision.

According to Furiati, if it is proven that the appointment does not meet the requirements of the State-Owned Companies Law and the Petrobras Bylaws, minority shareholders or control bodies may ask that the appointment has no effect as it represents, in theory, an abuse by the government of its position. of Petrobras’ controller.

“Any non-unanimous approval of Paes de Andrade’s name would strengthen a lawsuit against the appointment,” he said.

For lawyer André de Almeida — one of the creators of the class action (collective action brought by minority shareholders) against Petrobras in 2014, which led the state-owned company to make a US$ 2.9 billion agreement to end the legal dispute — the current scenario already justifies judicial questioning by the shareholders:

“The appointment of another new president in 40 days only reinforces the view that there is no corporate separation between the Federal Government and Petrobras. controller, and not of the company. This is a disrespect to Petrobras’ corporate objectives.”

Ciro defends nomination

For ex-minister Luiz Carlos Bresser Pereira, with the change in command of the state-owned company, Bolsonaro opens up the electoral use of Petrobras:

“The president wants to be reelected and wants to use Petrobras prices for that, which is a disaster. It is evident that the logic of replacing the president of Petrobras is to allow price manipulation.”

Behind the scenes, the government is already discussing a longer interval between readjustments, which could exceed one hundred days. One of the arguments against this strategy is the risk of shortages, because when the company practices prices below those charged on the international market, importers suspend the purchase of fuel. And without imports, it is not possible to fully serve the market.

In Davos, Guedes said that the Petrobras board is the one that talks about pricing policy.

The Chief of Staff, Ciro Nogueira, said he did not expect there to be a further increase in fuel prices before the official departure of José Mauro Coelho, but that this was the decision of the state-owned company. And he defended the nomination of Paes de Andrade, in an interview with SBT:

“I don’t believe that (it doesn’t meet the requirements). It’s a lot of speculation. There are now a lot of experts on the Petrobras statute giving an opinion. It’s almost impossible for a minister to indicate a name that is not in a position to be approved,” he said, and added that Paes de Andrade was successful in the private sector and is competent.

See?: Change in command of Petrobras could take more than a month
Petrobras’ actions in Brazil and the US were affected by the government’s action. Ordinary papers (with votes) fell by 2.85% and those without votes fell by 2.92%. Abroad, ADRs (share receipts) closed down 3.8%, after falling more than 12% in pre-market trading.

For BTG Pactual, the new change reinforces the government’s difficulty in finding a balance between the interests of the Union and the company’s statutes. The bank assesses that new fuel increases will hardly be accepted, putting the price policy to the test.

“We fear that the real test is yet to come. Ultimately, we think the new CEO faces a difficult dilemma: how to preserve his own job following company policies and without compromising Brazil’s fuel availability?

For Credit Suisse, the changes raise investors’ perception of risk, but the State-owned Companies Law and the Statute could shield the oil company and avoid fuel subsidies as in the past.

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