Sector News

Petrobras Names New Chairman

March 27, 2015
News
Brazil’s state-run oil firm Petroleo Brasileiro SA said Thursday that it appointed Luciano Coutinho, head of the country’s development bank, as its new chairman.
 
Mr. Coutinho replaces Guido Mantega, Brazil’s former finance minister, and is likely to only serve as interim chairman until the company’s next shareholders meeting, according to a person familiar with the matter.
 
A Petrobras spokeswoman declined to elaborate on whether Mr. Coutinho’s appointment is permanent or on an interim basis.
 
Mr. Coutinho is widely considered a government insider, and his appointment may disappoint analysts and investors who had been hoping for an outsider to helm the board at a time when Petrobras is struggling to deal with the fallout from a vast corruption scandal.
 
Mr. Coutinho has been a Petrobras board member since 2008, and has been the head of he country’s development bank, known as BNDES, since 2007.
 
He steps into the role at a crucial time for the company. It is in the midst of a widespread corruption scandal in which four former executives are accused of participating in a yearslong bribery scheme. The scandal has pummeled the company’s market value, caused a shake-up of its executive ranks, and forced it to scale back an ambitious spending program.
 
Political parties, many politicians, companies and former Petrobras executives have repeatedly denied wrongdoing. Others have said they are cooperating with authorities, while some have declined to comment.
 
The Petrobras fallout has also contributed to a dismal overall economic picture for Brazil. Thousands of workers in the oil industry have been laid off in recent months, adding to a bleak unemployment picture here.
 
Mr. Coutinho led a controversial expansion of the development bank in an effort to fuel economic growth. The strategy attracted criticism, including from the country’s recently appointed finance minister, because the loan program focused on large companies who took advantage of lower interest rates.
 
By Will Connors
 

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