Sao Paulo – Caio Mario Pace de Andre, a senior official in Brazil’s economy ministry, will be the next chief executive of the state-owned oil company Petrobras, the government said Monday, replacing a predecessor who had served less than two months.
Paes de Andrade will take over from outgoing CEO Jose Mauro Coelho, who was elected head of Brazil’s top oil company in early April, becoming its fourth chief executive in the last two years.
The shock, according to analysts, is President Xavier Bolsonaro’s latest bid to influence Petrobras’ fuel price policy because he wants to increase his chances of re-election amid power-driven inflation.
The Ministry of Mines and Energy said in a statement announcing the change of leadership that Brazil was facing “extreme instability” in the oil and gas market. It did not specify the reason for Coelho’s removal, nor did it say when the new chief would officially take office.
US-educated Paes de Andrade previously advised Economy Minister Paolo Guedes on digital governance and ran for chief executive role in early April when selecting Coelho.
Petrobras will first have to elect Pace de Andre to its board, as only board members can be appointed CEO, according to company rules.
In his own statement, Petrobras later said the change would “indicate the dismissal” of other board members elected on April 13 and would require a new election for the positions.
The change comes just two weeks after Bolsonaro replaced his Minister of Mines and Energy, tapping another high-ranking Economy Minister for the job.
Bolsonaro has protested against Petrobras’ billion-dollar profits, contributing to double-digit inflation, including rising consumer prices, including fuel, ahead of the October presidential election.
But so far his move to replace Petrobras officials has had little effect on the company’s pricing of petrol and diesel.
The Brazilian truckers, who crippled the country by striking under Bolsonaro’s predecessor Michel Temer, are the main supporters of the far-right leader.
Claudio Porto, founder of Macroplan Consultancy, described the jolt as a “clear strategy of political-electoral motivation” and would probably only impress Bolsonaro supporters.
Ilan Arbetman, an analyst at Ativa Investments, pointed to the “negative signals” in the market as the sudden CEO switch suggests that the majority of Petrobras shareholders do not agree with the firm’s existing energy policy.
He added that fuel price adjustments could further widen the gap, widening the gap between market and local prices. (Reporting by Carolina Police in Mexico City, Gabriel Araujo and Peter Frontini in Sao Paulo; Editing by David Ali’s Garcia, Muralikumar Anantraman and Simon Cameron-Moore)