the effects of successive changes in the command of Petrobras – Market – Estadão E-Investidor – The main financial market news

  • Petrobras presidents face instability in office and political pressure
  • In two years, the state-owned company undergoes the third change of CEO. Stocks are penalized by political risks and trade at a discount
  • For analysts, changes have little practical effect on the oil company’s pricing policy

It’s your first few months at your new job. You went through a difficult and competitive selection process, but in the end your managers handpicked you to take on a great challenge. Every day you go to work, review the demands, strictly follow the company’s policy – ​​that is, everything you were hired to do.

Suddenly, your managers, who nominated you for the job, start criticizing you publicly. And to criticize him precisely for following the company’s policies, which were already known to these superiors. In the end, your resignation is announced and your replacement comes in and proceeds to do exactly what you were doing.

This is the cycle that the presidents of Petrobras have been going through, especially since 2019. Since then, Roberto Castello Branco, General Joaquim Silva e Luna and José Mauro Coelho have occupied the chair of the state-owned company’s presidency, but ended up being fired due to government discontent with fuel price increases.

“The management of Petrobras was the first crack in the liberal image that the Bolsonaro government tried to sell. But it was from the successive attempts at intervention that the president showed that he is not liberal at all. He remains devoted to the military-nationalist and interventionist model that he has always defended in his nearly thirty years as a deputy,” says Mario Goulart, an analyst at 02Research. “Liberalism was a facade of convenience to get elected,” he says.

With each change, the new incumbent spent less and less time in office: Castello Branco remained at the helm of the oil company for two and a half years (January 3, 2019 to April 13, 2021); Silva e Luna did not complete 1 year in management (April 16, 2021 to April 13, 2022); finally, Mauro Coelho stayed just over 1 month (April 14, 2022 to June 20, 2022).

With each exchange, the market became less scared. Despite having officially left on April 13, 2021, Castello Branco’s resignation was announced on the night of February 19, 2021, on President Jair Bolsonaro’s social media. In the following trading session, PETR4 shares fell 21.51%, with investors fearing political interference in the oil company.

Contrary to what was thought, Silva e Luna entered with a speech simulating that of his predecessor Castello Branco, which reassured investors. The military man stated that he would respect Petrobras’ pricing policy, that is, he would not intervene in fuel prices.

His resignation, announced on March 28 this year, no longer had the same negative impact as Castello Branco’s dismissal. On that date, the shares fell 2.17%, but rose 2.22% in the following trading session.

After the departure of Silva and Luna, the imbroglio formed in the succession of Petrobras. Initially, Adriano Pires would be the professional nominated for the presidency of the state-owned company, but alleged conflicts of interest in the performance of the executive in the oil and gas sector undermined his appointment.

In the end, Mauro Coelho took over the post and left after 40 days, also in the wake of government criticism of rising fuel prices. Now, the successor appointed by the government should be Caio Paes de Andrade, current secretary of Debureaucratization, Management and Digital Government.

“Castello Branco left due to a more dynamic price parity, with little lag in relation to the international market. This dynamic was a little slower in the management of Silva e Luna, when it was decided to continue following the policy of parity of prices, as required by law, but in a more spaced way”, says Ilan Arbetman, analyst at Ativa Investimentos. “Today, it appears that any sign of an increase is being negative for the government.”

While there is no official inauguration of Paes de Andrade, the interim president of Petrobras is Fernando Borges, executive director of Exploration and Production of the oil company. In the last 30 days, PETR4 is down 13%. In the year, the shares are still up 16%, at R$ 27.07.


The Ativa analyst explains that the State-Owned Companies Law prevents losses in public coffers due to state-owned companies. The policy of fuel price parity is also instituted by regiment, which would also require a change in legislation to be changed.

This means that the role of the president of Petrobras is limited, even with all the changes made by the government. Arbetman points out that the pricing of oil derivatives involves a complex formula, which takes into account the price of oil on the international market, exchange rates and taxation.

“We saw the last CEOs removed from office so that the government could signal this dissatisfaction (with the price of fuel), but the truth is that presidents could do very little”, he says. “What they could do is apply a more spaced-out policy (adjusting fuel prices with delay), which has been done since Silva e Luna”, explains Arbetman.

To change the international parity policy, directors and directors must have a single opinion on the change. “But according to the State-owned Companies Law, these executives are responsible for the individual if any of the approved changes cause harm to the people ahead. Laws are good and CEOs have little room to maneuver,” says the expert.

While the scope for changes in pricing policy is slim, analysts are divided on recommendations for stocks given the political stress. In Arbetman’s view, Petrobras is being negotiated at a very large discount due to concerns about interference.

“We reinforce our understanding of the attractiveness of the valuation company’s current situation even in the face of the current situation and we believe that a normalization of the scenario should ease the pressures suffered by the company’s action in recent days”, says Ativa Investimentos, in a comment.

XP also recommends the purchase of the papers, in the wake of the valuation discounted. “We recognize that risks have increased, both internationally (global recession) and domestically (political). But these sensitivity analyzes indicate that Petrobras remains an asymmetric bet”, explains André Vidal, head of oil, gas and basic materials at XP. “Petrobras stands out as the cheapest O&G major in the world.”

However, some analysts see the risks as too high. Eleven maintains a neutral recommendation for the roles. “We believe that this (Mauro Coelho’s departure) can accelerate the change of the board of directors that is in process and that noises of government interference in the State company continue to harm the performance of the stock”, says the research.

former presidents

Arbetman says he has never seen a period with such constant changes in management at Petrobras as in the last two years. However, being president of the oil company was never a very stable job. In the last 20 years, 11 executives have been in the chair – an average of 1.8 years per executive. In the last decade, there were 8 presidents.

“In the last 7 years, we had 6 presidents. And now, in addition to interfering with prices, the government wants Paes de Andrade to take office very quickly,” says Danielle Lopes, partner and equity analyst at Nord Research. “If the president of Petrobras, in the government’s view, is unable to contain the transfer of prices to the public, especially at election time, some movement is made”, highlights Lopes.

Check out the list of former Petrobras presidents and the effect on the company’s shares. The stock valuation data in each period was collected by Einar Rivero, from TC/Economatica:

  • José Eduardo Dutra (January 2, 2003 to July 22, 2005)

Former senator José Eduardo Dutra was the first president of Petrobras during the Lula government. While he was ahead of the state-owned company, the oil company’s shares rose 172.59%.

“During his tenure, the company achieved record levels of profitability and cash generation, and production in Brazil reached a record monthly average of 1,755 million barrels a day in June/05. The construction of four new platforms was contracted, which should allow the company to reach production of 2,300 thousand barrels per day by 2010”, says a statement to the market, published by Petrobras at the time.

Ten years after leaving, Dutra was accused by Pedro Corrêa, former president of the PP, of having knowledge about the corruption scheme known as ‘petrolão’.

  • Sergio Gabrielli (July 22, 2005 to February 13, 2012)

Sergio Gabrielli was president of Petrobras between the Lula and Dilma governments. In total, he spent more than six years in the position. At the same time, the company’s shares rose 130.17%. At the time, PT left the presidency of the state to run for mayor of Salvador.

  • Thanks Foster (Feb 13, 2012 to Feb 4, 2015)

Chemical engineer Maria das Graças Silva Foster had already been with Petrobras for 30 years when she was nominated for the presidency. She spent just over two years in the position, during which PETR4 shares fell by 53.85%.

Graça Foster resigned 10 months after the discovery of the Petrobras corruption scandals, in the context of the Lava-Jato operation.

  • Aldemir Bendine (6 February 2015 to 30 May 2016)

Aldemir Bendine took over Petrobras in the ‘eye of the hurricane’, when corruption cases came to light, still under Dilma Rousseff’s government. The executive remained in office until the issues related to the impeachment of the then president of the Republic were funneled. In mid-2020, Bendine was sentenced to six years and eight months in prison for passive corruption in a Lava Jato Operation.

While he was ahead of the oil company, PETR4 shares fell 8.11%.

  • Pedro Parente (May 30, 2016 to June 1, 2018)

After Michel Temer assumed the presidency of the Republic in place of Dilma Rousseff, Pedro Parente was the executive chosen to lead the recovery of Petrobras. PETR4 shares accumulated a rise of 93% in the period in which Parente was ahead of the state-owned company.

It was during Parente’s administration that the policy of international price parity was implemented and fuels began to be readjusted more frequently. The price increases triggered a major truck drivers strike from May 21, 2018 to June 1, 2018.

To calm the class, the oil company announced reductions in diesel prices. At the end of the grave, Parente decided to step down. “Again, the president left due to political pressure for Petrobras to interfere in fuel prices”, says Goulart, from 02Research. “This conflict has been going on for some time.”

  • Ivan Monteiro (June 1, 2018 to January 3, 2019)

The second president of Petrobras in the Temer administration was Ivan Monteiro. With the election of Jair Bolsonaro, Monteiro left the position of CEO. In the six months he was president of the state-owned company, the company’s shares rose 58.68%.

  • Roberto Castello Branco (January 3, 2019 to April 13, 2021)

After Monteiro left, Roberto Castello Branco assumed the chair of president of Petrobras – the first appointment of the Bolsonaro government. He held the post just over two years, the longest time since Graça Foster.

In the period in which he was in office, the papers walked sideways: they accumulated a return of 0.46%, in the wake of the effects of the coronavirus pandemic on global economies. He left in April 2021, after pressure from the government related to rising fuel prices and threats of further strikes by truck drivers.

  • Joaquim Silva e Luna (April 16, 2021 to April 13, 2022)
  • José Mauro Ferreira Coelho (April 14, 2022 to June 20, 2022)

In the same way that Castello Branco, Silva e Luna (79.29%) and Mauro Coelho (-3.53%) suffered pressure from the federal government after increases in fuel prices and ended up leaving their posts.

  • Fernando Borges (June 20, 2022 – Current) – Interim

Currently, the interim president is Fernando Borges.