Re-Loaded Petrobras Board and Audited Results Coming, Levy Says

Re-Loaded Petrobras Board and Audited Results Coming, Levy Says

By David Biller/Bloomberg

3:04 PM BRT
April 20, 2015

Brazil’s state-run oil producer Petroleo Brasileiro SA has improved its management and should soon have a board “loaded” with people from the private sector, said Finance Minister Joaquim Levy.

The expectation is for the company to release audited financial results this week and appoint a new board of directors at an April 29 shareholders meeting, Levy said at the Bloomberg Americas Monetary Summit in New York.

“I hope it happens that in a couple of days they are going really to overcome the question about the audited statement,” Levy said. “Having a new board that will be loaded with people with the private sector and who could vote” will help improve corporate governance.

The stock has risen 6.8 percent since April 13 when it announced it would present audited results to the board for approval this week, overcoming difficulties it has had calculating graft-related writedowns from the wide-ranging kickback and bribery scheme. Shares were up 0.6 percent to 13.09 reais at 2:51 p.m. in Sao Paulo.

Petrobras has been battling to recover lost ground after its shares in March fell to the lowest in more than a decade. Near daily revelations of a corruption scheme at the oil producer, in which contractors paid bribes for contracts, drove underperformance.

Vale CEO

Murilo Ferreira, the chief executive officer of miner Vale SA, is the company’s candidate for chairman. Choosing the 61-year-old Vale executive breaks from a tradition of political appointees. Investors want the government to improve transparency in a company that has seen its market value plummet in the past four years amid production shortfalls and allegations of political interference and corruption.

The company has made advances since Aldemir Bendine, the former head of state-run Banco do Brasil, took the helm in February. It has secured more than $9 billion from loans and a platform sale and leaseback deal, enough to cover its funding needs for this year. The company is also looking to raise $13.7 billion in the next two years from asset sales to help reduce costs and indebtedness.

Petrobras has lacked the open floor plan for top management featured at Banco Bradesco SA, where Levy was an executive before becoming Finance Minister this year. That ensured shared accountability, quick response to changing situations, and allowed everyone to watch what others were doing, Levy said.

“In Petrobras it was not like this,” Levy said. “Now it is becoming like this. And this is one of the best ways to be assured that governance continues to be improved.”