Constant changes at the helm of state-owned Petrobras due to CEOs disagreeing with Brazil’s President Jair Bolsonaro regarding fuel prices have remarkably not impacted the company’s short- to mid-term plans.

“Despite being exposed to political machinations at the top level Petrobras has always been a company run by the middle management,” Rystad Energy Senior Vice President and Head of Latin America Schreiner Parker told Hart Energy in an emailed response to questions. “As such, it’s been able to survive many adverse situations and maintain strategic continuity in spite of the revolving door at the highest levels of the company.”

Brazil President Jair Bolsonaro May 2022
Record first-quarter profits reported by Petrobras coupled with high executive salaries, especially at the CEO position, should “obligate managers to seek an alternative to increasing prices,” Brazil’s President Jair Bolsonaro warned this month on Twitter. (Source: Marcelo Chello /

In the last two years, Bolsonaro has pushed out three Petrobras CEOs in an attempt to limit fuel price increases to appease his voter base ahead of a reelection bid on Oct. 2 when Brazilians return to the polls. Economic issues including fuel prices and inflation as well as Bolsonaro’s handling of the pandemic are issues likely to influence voters’ electoral decisions.

This week, Bolsonaro’s most recent spat led to the departure of Petrobras CEO José Mauro Ferreira Coelho who served briefly in the position between April 14 and May 23. Petrobras’ stock price fell nearly 12% on initial details of his ousting.

Bolsonaro Warning

Even with a seemingly constant churn at the CEO position, Petrobras’ strategic investment goals for 2022-2026, including plans to divest noncore assets, bring on new floating production units and maintain debt at an optimal level, have yet to be impacted.

Petrobras reported recurring net income of $8.4 billion in first-quarter 2022 driven by combined oil, gas and NGL production of 2.8 million boe/d and an average Brent price of $101.40/bbl, the company revealed during its quarterly webcast earlier this month.

These record profits coupled with high executive salaries, especially at the CEO position, should “obligate managers to seek an alternative to increasing prices,” Bolsonaro warned this month on Twitter, hinting at actions that could potentially impact Petrobras’ capital spending or dividend policy.

“I don’t think Bolsonaro will be able to modify Petrobras’ fuel policy in the short term,” Welligence Vice President Andre Fagundes told Hart Energy. “After the car wash scandal, Petrobras’ governance has improved significantly, and such an important decision is not taken by the CEO of the company himself. To change the current fuel policy, the change needs to be suggested by the CEO and its director and approved by an independent shareholder’s board of directors.”

For now, Petrobras still expects production to slide to average around 2.6 million boe/d in 2022 due to onshore and offshore asset sales, and the start of co-participation agreements for the Buzios Field which impact production sharing agreements. Longer-term, Petrobras production is still forecast to reach 3.2 million boe/d by 2026, as part of the company’s growth plans.

CEO Shuffle

Petrobras will soon hold an extraordinary general meeting to promote “removal and election of a member of the board of directors, and appointing Caio Mario Paes de Andrade, to replace José Mauro Ferreira Coelho,” the company said earlier this week in a statement on its website, citing a letter and request from Brazil’s Ministry of Mines and Energy. Paes de Andrade will also be evaluated for the position of CEO, the company added.

Coelho’s removal from the Petrobras board will require the election of eight board members and the election of the chairman, Petrobras confirmed May 25 in a separate statement.

This week’s firing at Petrobras was not the first and may not be the last at the rate Bolsanaro is going.

Coelho’s predecessor Joaquim Silva e Luna was relieved of his duties as Petrobras CEO only after around a year on the job. Prior to that, the market-friendly Roberto Castello Branco, who oversaw Petrobras’ divestment push and debt reduction plan, was ousted in 2021.

The recent CEO shake-up comes just weeks after Bolsonaro named Adolfo Sachsida to replace Bento Albuquerque at Brazil’s Ministry of Mines and Energy. A disagreement again related to fuel prices was behind the ministerial dismissal.