Wednesday, June 7, 2023

New Petrobras CEO takes office, vows to continue maximising value from deepwater assets

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Brazil’s state oil company Petrobras finally has a new Chief Executive Officer (CEO) Jose Mauro Coelho, putting an end to the messy public leadership change.

Coelho took up his appointment last week in the presence of Brazil’s Minister of Mines and Energy, Bento Albuquerque; the Director General of the National Agency of Petroleum, Natural Gas and Biofuels (ANP), Rodolfo Henrique de Saboia; and the new Chairman of the Board of Directors of Petrobras, Márcio Andrade Weber.

And at a very solemn ceremony, the new CEO vowed to uphold Petrobras’ fuel pricing policy – the same policy that led to the firing of his predecessor, Joaquim Silva e Luna, after he imposed it.

Back in March, the Brazilian oil and gas producer had announced a major hike in the prices for diesel, gasoline and liquefied natural gas (LNG), resulting in much disapproval from citizens and the nation’s Congress as the increase came amid the highest consumer price inflation rate in Brazil in nearly five years.

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Brazil’s monthly inflation soared the most since 2003 as gasoline skyrocketed by 6.95%.

It is important to note that Petrobras tracks international prices while shielding consumers from short-term volatility, but the latter was not the case in this instance.

Luna had only been the CEO for a little under a year, after being appointed in April 2021 after his own predecessor was forced out amid a similar dispute over domestic fuel prices. And now Luna has been booted out for the very same thing.

Before Coelho’s appointment, Brazil’s Ministry of Mines and Energy endured a messy two weeks.

The previous nominee for CEO, energy consultant Adriano Pires turned down the position, citing concerns of a conflict of interest as reports noted that his consultancy, Rio de Janeiro-based Brazilian Centre for Infrastructure (CBIE), advises companies that do business with Petrobras. A few days before that, the government’s initial pick for Chair of Petrobras’ Board Rodolfo Landim turned down the position.

Now, Coelho has big plans for Petrobras.

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“We will continue to maximize portfolio value, focusing on deepwater and ultra-deep-water assets, prioritising exploration and production investments in the important pre-salt province, “he said in his first address as CEO. “The disinvestments will continue so that companies with adequate size and experience in this type of asset can continue production or extend the useful life of the fields and increase the recovery factor.”

Coelho was the government secretary of petroleum, natural gas and biofuels in 2020 and 2021. And with a degree in industrial chemistry, he enters the job with 25 years of experience in the energy sector.

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