Brazilian President Lula fires Petrobras chief over dividend payments

Issued on: 15/05/2024 – 04:56

2 minutes

The move follows a recent row between Petrobras and shareholders over dividend payments, which increased concerns about the government’s influence on the listed company’s decision-making.

Jean Paul Prates, a former senator and ally of Lula, “has been fired,” a presidential spokesman said Tuesday evening.

Prates, a lawyer and economist, was appointed by Petrobras’ board of directors last January, shortly after the left-wing Lula was sworn in for a third term. He previously held this position from 2003-2011.

Prates previously served as a senator in the state of Rio Grande do Norte and was a member of Lula’s Workers’ Party.

When nominating him for the position, Lula described Prates as an energy sector specialist with 30 years of experience in the oil, natural gas, biofuels and renewable energy sectors.

But the 55-year-old has faced fierce criticism in recent months after Petrobras announced it would not pay an extraordinary dividend to investors following its second-highest ever net profit last year.

The March announcement sent the company’s stock price plummeting and was seen by some analysts and opponents as direct government intervention.

Lula has repeatedly accused Petrobras executives of thinking only about satisfying the group’s shareholders at the expense of consumers.

Prates said at the time on X that it was “legitimate” for the administration to take a position “led by the president” and his ministers.

“That’s exactly what happened” regarding the dividend decision, he added.

The Petrobras board finally approved the dividend payment at the end of April.

The company confirmed in a statement on Tuesday that it had received a request for a meeting of the board of directors regarding the early termination of Prates’ mandate.

Just over half of Petrobras’ capital is owned by the Brazilian state and the rest by private shareholders.

The company previously experienced a turbulent period during the four-year term of Lula’s predecessor, far-right President Jair Bolsonaro, who strongly opposed the company’s pricing policies.

During that time, the company saw four CEOs in quick succession.

The Brazilian government has not mentioned who could replace Prates, while local media have reported that a possible favorite could be Magda Chambriard, the former head of Brazil’s oil industry regulator.

(AFP)