Back in 2018, we at The Brazilian Report discussed how Petrobras’ utter dominance of the country’s oil refining industry puts the interests of its stakeholders at odds with one another. Petrobras’ quasi-monopoly creates a rift between minority shareholders — who are merely interested in raising the company’s profits and value — and the government, which owns a controlling stake and must consider the company’s role in public policies, inflation control, and its institutional symbolism.
That division has rarely been more apparent than today — as President Jair Bolsonaro angles to swap out the company’s chief executive officer in a push to tame rising fuel prices.
In a Facebook post, Mr. Bolsonaro announced that his administration will submit a potential replacement CEO to the Petrobras board. The president’s pick to replace the highly-respected Roberto Castello Branco is retired Army general Joaquim Silva e Luna.
Mr. Silva e Luna served as Defense Minister under former President Michel Temer (2016-2018), being the first member of the military to occupy the position in democratic times. In 2019, Mr. Bolsonaro appointed him to lead Itaipu, the massive hydroelectric power plant co-owned with Paraguay.
“This is a bombshell,” says Eduardo Guimarães, an analyst at market intelligence firm Levante Investimentos. “Our initial reading of the situation is that this is bad news for shareholders, as Roberto Castello Branco was doing an excellent job. He focused on rehabilitating Petrobras’ finances, selling off assets, and...
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