Another change of direction for Petrobras. On May 24, engineer Magda Chambriard, 66, was appointed head of the oil giant by President Luiz Inacio Lula da Silva (known as Lula), after the dismissal, ten days earlier, of the former senator of Jean Paul Prates Workers’ Party. The latter has led the company since January 26, 2023. Magda Chambriard thus becomes its sixth president in just three years.
The instability at the management of Petrobras, valued at some 90 billion euros, highlights the governance difficulties facing the Brazilian multinational. Founded in 1953 by the nationalist president Getulio Vargas (1934-1945 and 1951-1954), the company was first a state monopoly before opening its capital in 1997, as part of a wave of privatizations carried out under the government of Fernando Henrique Cardoso (1995-2003).
This “mixed” model, where the State retains a majority stake (28.67% of the company’s share capital and 50.26% of the ordinary shares), forces its managers to respond to the projects of the government in place, while satisfying the appetite of its private investors. “At the slightest disagreement between the two camps, the government always ends up changing the president of the company”notes Pedro Rodrigues, director of the Brazilian Infrastructure Center, a consulting company specializing in fossil fuels.
Thus, the departure of Jean Paul Prates follows a dispute with Lula linked to his approval, on April 25, of the payment of 22 billion reais (nearly 4 billion euros) in extraordinary dividends for the year 2023 – the second most lucrative financial year in the company’s history with 24.8 billion dollars (23.05 billion euros) in profits.
The former metallurgist would have preferred that Petrobras take advantage of its flourishing results to invest in sectors favorable to the country’s economic growth and job creation: increasing the company’s refining capacity in order to enable Brazil to reduce the import of goods derived from oil, projects linked to the energy transition and the reconstruction of the naval industry.
Record losses
Lula sees Petrobras as “an instrument for carrying out public policies”, analyzes Pedro Rodrigues. This vision of the company’s role was abandoned following the impeachment of Dilma Rousseff in 2016. During her second presidency (2014-2016), Petrobras faced a massive corruption scandal and financial problems caused by the fall the price of oil and the explosion of debt. In 2015, the company recorded record losses of 34.8 billion reais (6 billion euros).
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