Petrobras Burns Through Another CEO As Coelho Resigns

In what by this time can’t be seen as a shock move, Petrobras chief executive officer Jose Mauro Coelho has resigned from the company amid immense political pressure.

Coelho is one more name in a long line of CEOs that have fallen victim to apparently the hottest chair in Brazil. The revolving door of CEOs at the company has many reasons.

Some fell out of favor with the Brazilian President Jair Bolsonaro, buckled under political pressure, underperformed, became a victim of a change in the political landscape, or were caught up in some sort of scandal like Lava Jato.

The Brazilian oil major said on Monday that Coelho resigned from both the company and the board of directors and that Petrobras was looking to appoint an interim CEO. This comes just two months after Coelho was sworn in as the new chief executive officer of Petrobras.

Coelho succeeded Roberto Castello Branco and Joaquim Silva e Luna, both ousted after disagreements with Bolsonaro on the company's fuel pricing policy. His destiny was pretty much identical, only he was able to leave without being fired from the role.

Namely, Petrobras said last week that it would be raising gasoline and diesel prices at its refineries. As a result, preferred shares in the company fell 5 percent right after the announcement. This was met with politicians in power, such as Brazil’s Lower House Speaker Arthur Lira, immediately calling for Coelho's resignation.

Bolsonaro, who is fighting for reelection in October and is not in a good position due to high inflation over energy prices, called the move by the oil company a betrayal of the Brazilian people. Reportedly, he and Lira have already discussed opening a congressional investigation into Petrobras' board of directors.

It is worth noting that Petrobras received nominations for two new board member candidates from minority shareholders just last week. The two candidates in question are José Joao Abdalla Filho and Marcelo Gasparino da Silva.

On the same day as the announcement of Coelho’s resignation, Petrobras said that the Board chose Chief Exploration and Production Officer Fernando Borges to be the interim CEO of the company. Borges is now the fourth chief executive of Petrobras since Jair Bolsonaro became president in 2019. The naming of a fifth – Caio Mario Paes de Andrade – is already in the works.

The Brazilian president was more than impatient with Coelho as he decided to give the reigns of Petrobras to senior economy ministry official Caio Mario Paes de Andrade less than two months into Coelho’s CEO term. The only reason he was still the Petrobras CEO until now was the fact that Paes de Andrade can take over after being elected to Petrobras' board of directors. He has not been added to the board yet.

In a separate announcement, Petrobras said that a board member took a personal initiative to suggest a 45-day freeze on fuel prices in return for the government to withdraw its proposed shakeup of the company's board and management. The suggestion has not yet been formally discussed at the company.

To contact the author, email bojan.lepic@rigzone.com