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Brazil’s Petrobras calls meeting to elect Bolsonaro ally – Washington, District of Columbia

Washington, District of Columbia 2021-02-23 19:22:38 –

Rio de Janeiro (AP) — A board member of Brazilian oil giant Petrobras paved the way for approval on Tuesday …

Rio de Janeiro (AP) —Brazil’s oil giant Petrobras’ board of directors paves the way for approval of retired generals with no industry experience, takes command of state-owned enterprises, and fears government interference with pricing Caused.

President Jair Bolsonaro last week announced that former Defense Minister Joaquin Silva Erna would take over the company, threatening to strike the recent rise in fuel prices and appealing to truck drivers who stagnated the country in the 2018 strike. I’m trying.

The Petrobras board of directors resolved on Tuesday to convene an extraordinary general meeting to replace Roberto Castello Branco with Silva Erna, the company said in a statement. Once elected, Silva Erna can be appointed Chief Executive Officer.

Analysts said the nomination showed investors that political interests were prioritized over the financial position of one of Brazil’s most iconic companies, and Petrobras shares plummeted. It also stimulated market fears that his administration’s free market economic agenda, including ambitious privatization plans, could be jeopardized, at least until the end of the 2022 reelection campaign.

“It would have been a more natural path if he (Bolsonaro) had treated it differently. The way Bolsonaro used his power … created some tension in the market,” said Brasilia-based. Lucas de Aragão, a partner of the political consultant Arko Advice, who puts up, said. “It’s a matter of broken expectations.”

Petrobras, a company with a national identity, is also a major sponsor of Brazilian art and cultural events. It is one of the leading players to take advantage of offshore presalt oil reserves, which former President Luis Inacio Rulada Silva called Brazil’s “passport to the future” in 2008.

Bolsonaro warned that more could come as Petrobras shares plummeted by about 20% over the weekend. “We’re going to stick our fingers in the electrical department. This is another matter,” he said.

During her administration, which ended with impeachment, President Dilma Rousseff artificially curtailed fuel and energy prices. Inflation soared when it was finally unleashed in 2015, which contributed to her popularity plunge.

On the 2018 campaign trail, Bolsonaro spoke openly about his indifference to economic policy and introduced all the questions to Paulo Geddes, a free market economist trained at the University of Chicago. He chose him as Minister of Economy.

Castello Branco, the current CEO of Petrobras, studied at the same university, and Guedes chose him as the company’s leader. In recent years, executives have been working to restructure the company through the sale of non-strategic assets, using the proceeds to repay debt and invest. Castello Blanco’s mission ends at the end of March.

Bolsonaro’s decision “shows the weakening of the Minister of Economy and its influence over the president,” said Gilbert Braga, a professor of finance at the University of Evemec in Rio de Janeiro. “Given that this is the end of liberal economics, the market is accepting it in a way.”

Some analysts are even worried that Guedes could resign and someone who matches the instincts of another general or Bolsonaro’s interventionist could replace him. “It would be disastrous from a market perspective,” Braga added.

Allergan said Bolsonaro chose a reliable person in Luna. But Luna may not be able to prevent fuel price readjustments on her own, he said.

“It’s important to remember that Petrobras has a board of directors responsible for many important decisions, including pricing.”

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