Vale CEO Ferreira Said to Be in Talks to Head Petrobras Board

Vale CEO Ferreira Said to Be in Talks to Head Petrobras Board

By Anna Edgerton Sabrina Valle

9:20 PM BRT
March 10, 2015

(Bloomberg) — Vale SA Chief Executive Officer Murilo Ferreira is being sounded out to take over as chairman of the board of Brazil’s beleaguered oil producer Petroleo Brasileiro SA, people with knowledge of the discussions said.

Government representatives have spoken with Ferreira, 61, about replacing former Finance Minister Guido Mantega as chairman, according to three people who asked not to be named because the talks aren’t public. The next Petrobras board meeting in which a new leader could be confirmed will be on March 23.

Ferreira would be the first executive since at least 2003 to head the state-controlled oil producer’s board, replacing a political appointee who was known for his obedience to President Dilma Rousseff. After last month choosing Aldemir Bendine, a state banker backed by Rousseff’s party, to replace Maria das Gracas Foster as chief executive officer, the government recognizes the importance of choosing a market-friendly name to lead the board, one of the people said.

“He’s a great Brazilian executive, competent, with credibility, a good name for Petrobras,” consultant David Zylbersztajn, a former oil regulator who worked with Ferreira in the early 2000s, said in a phone interview from Rio. “Knowing Murilo, I can say he can stand his own.”

Vale and Petrobras press offices declined to comment on the possibility of Ferreira joining the oil company’s board.

Balancing Act

Well-regarded in the business community, Ferreira has refrained from criticizing the government when other industry leaders have challenged policies that contributed to above-target inflation and low growth in Rousseff’s first term. Ferreira’s name circulated in local press as a possible replacement for Mantega as Finance Minister after Rousseff won re-election in October, and again last month as a possibility to take over as Petrobras CEO.

The next chairman is faced with calls from investors to make Petrobras more independent from Rousseff and her party after the company lost $270 billion in market value in four years amid allegations of government interference and corruption. The government controls the oil producer with the majority of voting shares.

The board’s most urgent task is to get Petrobras’s third-quarter results audited after quantifying losses from a decades-long kickback scheme.

As Vale’s CEO, Ferreira challenge is to lead the mining company through a downswing in the commodities cycle in which the global price of iron ore has fallen 47 percent in 2014 and extended losses this year. Ferreira took the helm of Vale in May 2011.

Zylbersztajn, who’s critical of the current government’s oil policies, worked with Ferreira as a consultant at Aluminio Brasileiro SA and says his good relationship with the government doesn’t mean he would be a pushover.

“The fact that he gets along well with the controlling shareholder, doesn’t mean he has to sacrifice his independence,” Zylbersztajn said.

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