Petrobras' fourth chief executive in less than five years could finally bring needed change. Michel Temer, Brazil's interim president following the impeachment of Dilma Rousseff, has picked a new CEO for the scandal-hit $40-billion state oil producer. Pedro Parente, the former head of agribusiness giant Bunge's Brazilian operations, has promised to end political appointments at Petrobras. If he follows through, it would be a step towards better governance.
The commitment may sound unlikely coming from a government appointee who previously served on the board of Petrobras while acting as chief of staff to former Brazilian President Fernando Henrique Cardoso. But Parente, a former engineer who also served as the country's energy minister, is no political hack.
Best known for his stint as head of Bunge's local affiliate from 2010 to 2014, Parente has other business experience too. And when he last served on the Petrobras board, the group - smaller at the time - looked like a trailblazer for governments taking a more business-like approach to the management of national champions. It's a contrast to outgoing CEO Aldemir Bendine, formerly head of state-run Banco do Brasil, whose appointment was widely seen as part of Rousseff's meddling.
Parente will need both business and political skills to restore investors' faith in Petrobras. Stung by falling oil prices and fallout from a massive corruption probe, the company is straining under $130 billion of total debt - the most of any oil producer. It has also routinely failed to meet ambitious production targets. Along with tightening up governance, Parente will need to accelerate a planned $15 billion of asset sales.
Investors seemed to welcome news of the new CEO, pushing the company's New York-listed shares up early on Thursday. There's a heavy load on Parente's shoulders, however. Brazil's oil behemoth is inevitably seen as a proxy for Temer's efforts to create a more investment-friendly environment overall. Both men will have to make unpopular decisions to put Rousseff's interference and the taint of corruption behind them.
The commitment may sound unlikely coming from a government appointee who previously served on the board of Petrobras while acting as chief of staff to former Brazilian President Fernando Henrique Cardoso. But Parente, a former engineer who also served as the country's energy minister, is no political hack.
Best known for his stint as head of Bunge's local affiliate from 2010 to 2014, Parente has other business experience too. And when he last served on the Petrobras board, the group - smaller at the time - looked like a trailblazer for governments taking a more business-like approach to the management of national champions. It's a contrast to outgoing CEO Aldemir Bendine, formerly head of state-run Banco do Brasil, whose appointment was widely seen as part of Rousseff's meddling.
More From This Section
Investors seemed to welcome news of the new CEO, pushing the company's New York-listed shares up early on Thursday. There's a heavy load on Parente's shoulders, however. Brazil's oil behemoth is inevitably seen as a proxy for Temer's efforts to create a more investment-friendly environment overall. Both men will have to make unpopular decisions to put Rousseff's interference and the taint of corruption behind them.