May 3, 2012 / 9:09 PM / 7 years ago

Petrobras to replace more executives: minister

SAO PAULO (Reuters) - The chief executive of Brazil’s state-run oil company Petrobras (PETR4.SA) plans to replace more senior executives after dumping her refining and engineering chiefs last week, the country’s Energy Minister Edison Lobao said on Thursday.

Maria das Gracas Silva Foster, chief executive officer (CEO) of Brazil's state oil company Petroleo Brasileiro, gestures during the meeting of the Committee on Mines and Energy at the Lower House of Congress in Brasilia April 25, 2012. REUTERS/Ueslei Marcelino

Officials gave no reason for the house-cleaning, but CEO Maria das Gracas Foster, who took over in February, has been replacing politically connected Petrobras executives with people considered by most to be apolitical technocrats.

Chief Financial Officer Almir Barbassa will be the next senior manager to leave the company, Lobao told reporters in Rio de Janeiro. In an emailed statement, Petrobras later denied that it was considering replacing the CFO.

The heads of the international operations and engineering and technology departments will also be replaced, Lobao said without naming any candidates.

On April 27, refining chief Paulo Roberto Costa and Renato Souza Duque, Petrobras’ engineering chief, were replaced by Jose Carlos Cosenza and Richard Olm.

Refining chief Costa had been pressuring the government to raise fuel prices, which have not risen since 2008 despite rising global costs of crude oil.

The CEO “had said she would change out the entire management, but the executives of subsidiaries - BR Distribuidora and Transpetro - should stay for now,” the minister said.

BR Distribuidora is Petrobras’ service-station and fuels retail unit. Transpetro operates some of Petrobras’ oil and fuels tankers and pipelines.

Since taking over as CEO, Foster has followed in the footsteps of Brazilian President Dilma Rousseff, who appointed her, and sought to ratchet down politics in the executive suite.


Lobao also said government-controlled prices for gasoline and diesel will be raised only when international oil prices hit $130 a barrel.

The government, in an effort to control inflation, has not let Petrobras raise or lower wholesale gasoline or diesel prices since 2008. Brent crude was at about $116 a barrel on Thursday and reached $128 a barrel in March, not too far below the record highs of $147.50 it reached in August 2008.

With demand for fuel strong in Brazil and the country’s refineries and ethanol producers unable to keep up, Petrobras has been forced to import record amounts of gasoline at world prices only to sell it at a loss in the local market.

While Brazilian law allows companies to compete against Petrobras in the refining market, Petrobras’ pricing policies have squeezed out its remaining competitors and given it a monopoly on fuels production in the world’s sixth-largest economy.

Reporting by Leila Coimbra; writing by Reese Ewing; Editing by Gerald E. McCormick, Gary Hill, Jeb Blount and David Gregorio

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