New Petrobras chief exec rejects subsidies and government intervention

The deep-water oil producer will continue a divestment program that has raised cash in the past

Roberto Branco, chief executive of Brazilian oil company Petrobras. AFP 

The new head of Brazil’s state-controlled oil company criticised its history of government interference and vowed to pursue policies that will boost profit, echoing a wider pledge by president Jair Bolsonaro to reduce the state’s role in Latin America’s largest economy.

Roberto Branco, who was sworn in as chief executive of Petrobras, said he was “revolted” by the moral and financial crises the company has been through in recent years, and vowed to increase oil production and reduce the largest debt load of any publicly traded oil company. The deep-water oil producer will also continue a divestment program that has raised cash and streamline its operations, he said.

“Fuel prices should be in line with international ones, with a sound ‘no’ to subsidies or to attempts at having a monopoly,” said Mr Branco, adding, “We are pro-market economists. We like competition."

Brazilian energy minister Bento Albuquerque, who attended the swearing-in ceremony of Mr Branco as chief executive in Rio de Janeiro, said the government will end diesel subsidies that were put in place last year to appease striking truckers.

Mr Branco said Petrobras shouldn’t enjoy any monopolies and called for more competition in Brazil’s refining industry.

Investors have been encouraged by Mr Branco’s business-friendly statements since he was named for the position in mid-December. Petrobras closed up 2.45 per cent, the highest since December 7.

Mr Branco, who was previously a board member at Petrobras in 2015 and 2016, said the company has improved since a sprawling pay-to-play scandal became public in 2014 and prompted changes in corporate governance. He said Petrobras should focus on its core business and speed up oil production, while leaving aside other sectors. Fuel unit BR Distribuidora and midstream assets are among the ones that will be considered for possible sale, said Mr Branco.

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Read more:

Brazil, Bolsonaro and oil: a future in the balance

Petrobras joins global energy majors in posting surge in profits

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