Lula chooses political ally as the next director of Petrobras

Brazil’s next president Luiz Inácio Lula da Silva has nominated the chief executive of Petrobras, a close political ally, who has promised to review the way the state-run oil company is charged for fuel. control.

Senator Jean Paul Prates, who advised Lula on energy issues and is a member of his Workers’ party, which has been named the preferred candidate by the upcoming leftist administration to run the $66 billion conglomerate.

He say Petrobras The practice of adjusting domestic fuel prices in line with international dollarization rates – denounced by Lula during the election campaign – has been changed. Prates told local reporters in the capital Brasília on Friday that this does not “hurt investors or return on investment”. “It will change because the policy of the country will change.”

The new price guidelines will be developed by a “coalition of government”, including ministries and Petrobras, he added.

A market-based system that Latin America The largest hydrocarbon producer followed in terms of gasoline, diesel and cooking gas prices that have been controversial in recent times. Opponents say it transfers volatility to consumers and causes inflation.

It has been criticized by outgoing right-wing president Jair Bolsonaro, who fired three Petrobras executives within two years because of soaring fuel prices.

But private-sector investors, who hold less than two-thirds of the company’s equity, are concerned that any deviation from current policy could be financially damaging. main for Petrobras.

Under the last government led by the Workers’ party, or PT, the Rio de Janeiro-based conglomerate suffered billions of dollars in losses after being forced to provide subsidies.

“Removing the dollarization of fuel prices in my opinion is very difficult. It is an international commodity and [Brazilian] Marcelo de Assis, at consulting firm Wood Mackenzie, says the real component of the price is very small.

“Considering that we import more or less 30% of our refined oil products in Brazil, which has a very strong dollar component, you cannot change this overnight.”

Lula, who previously ruled Brazil from 2003 to 2010 and will take office on Sunday, has also called on Petrobras to invest more in refining capacity and play a bigger role in the clean energy transition. .

The company has in recent years doubled its main activity of pumping deep-water crude oil, while selling off non-core assets such as fertilizer plants and gas stations to reduce debt.

“We need to think about the future and invest in the energy transition to meet the needs of our country, planet and society, as well as the long-term interests of our shareholders,” Prates wrote on Twitter today. Friday.

The 54-year-old politician is also an economist and lawyer, whose resume lists nearly four decades of experience consulting for public-private projects in the oil, gas, and biofuels sectors. and renewable energy.

Petrobras said it has not yet received official notification of the nomination, adding that the final appointment is subject to board approval.

Petrobras’ São Paulo-listed preferred stock fell 1.2% on Friday. It is down about a quarter since Lula’s narrow win over Bolsonaro in October.

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