Petrobras Management Quits, Race On To Find Replacements



Petrobras Management Quits, Race On To Find Replacements
The CEO and other senior management at Petrobras resign amid a festering corruption scandal, unleashing a scramble to find replacements capable of restoring investor confidence in the company.

Reuters

RIO DE JANEIRO, Feb 4 (Reuters) - The chief executive and other senior management at Brazil's Petrobras resigned on Wednesday amid a festering corruption scandal, unleashing a scramble to find replacements capable of restoring investor confidence in the state-run oil company.

The firm's board of directors will meet on Friday to elect a new management team to replace CEO Maria das Graças Foster and five other senior executives, Petrobras said in a securities filing.

Petrobras shares rose more than 6 percent in early trading in Sao Paulo on the news before paring gains to trade about 1 percent higher near mid-day. The stock rose more than 15 percent on Tuesday - its biggest one-day gain in 16 years - helped by reports that President Dilma Rousseff had decided to dismiss Foster by the end of the month.

The timing of the resignations came as a surprise to the Rousseff administration, which was hoping for more time to find potential replacements, a government source told Reuters on condition of anonymity.

Rousseff had already asked Finance Minister Joaquim Levy, a University of Chicago-trained economist, to help sound out potential candidates for a new Petrobras leadership team, another government source told Reuters on Tuesday.

Investors have been betting that new leadership will help restore credibility to the scandal-tainted firm and ramp up production and boost profit.

"Graça (Foster) was not the biggest problem at the company, but it's a message," said João Pedro Brugger, equities analyst at Leme Investimentos in Florianópolis, Brazil. "The company is trying to tell the market that its management will become more professional."


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