Brazil to Offer Petrobras CEO Job to Former Minister Parente

(Bloomberg) - Brazil’s new government will formally invite well-seasoned business leader Pedro Parente to lead Petroleo Brasileiro SA, as the state-controlled oil producer struggles to reduce debt and navigate the fallout from the country’s biggest corruption scandal. Parente hasn’t said whether he will accept the offer.

Brazil’s Acting President Michel Temer will speak with Parente, the former president of agribusiness giant Bunge Ltd.’s Brazil unit and chief operating officer of multimedia company Grupo RBS, to try to convince him to lead the world’s biggest deep-water producer, said a spokeswoman for Temer’s chief of staff. Parente was also an energy minister under former president Fernando Henrique Cardoso, where he gained experience managing a national crisis when he oversaw energy rationing during a 2002 drought.

Parente as Petrobras’s chief executive would fit with Temer’s plans to form an investor-friendly economic team in an effort to restore growth in Latin America’s largest economy. The company is in the midst of an asset disposal program that has resulted in sales of about $2.1 billion since last year. Temer is expected to accelerate privatizations, including the possible sale of Petrobras’s fuel distribution business, to help close the budget deficit and win the confidence of investors, a government official with direct knowledge of the matter said this week.

The company may need government support as early as 2017 if it fails to raise a planned $14.1 billion from asset sales this year, Moody’s Investors Service said in a research report Thursday. Petrobras may also have difficulties refinancing an estimated $21 billion of debt coming due by the end of 2017 given its limited access to capital markets, Moody’s said.

Rio de Janeiro-based Petrobras is also defending itself against a class action lawsuit in the U.S., a source of concern for investors who have already seen the company report billions of dollars in graft-related losses and impairments from unprofitable investments, including refinery projects that remain unfinished. The host of financial and legal challenges facing the company had discouraged some Brazil’s leading oil executives from seeking the job.

To contact the reporter on this story: Anna Edgerton in Brasilia at aedgerton@bloomberg.net To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net Peter Millard, Walter Brandimarte

Copyright 2016 Bloomberg News.

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