CEO Magda Chambriard appointed Fernando Melgarejo, a director at Banco do Brasil’s pension fund, as the oil company’s chief financial and investor relations officer

06/17/2024

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Fernando Melgarejo — Foto: Divulgação

Petrobras CEO Magda Chambriard announced her first changes to the company’s executive team on Friday (14), nominating three new executives. Analysts interviewed by Valor expressed immediate doubts about whether the nominees possess the ideal qualifications for their respective roles.

For the position of chief financial and investor relations officer, Ms. Chambriard nominated Fernando Melgarejo, the director of investments at Previ, the pension fund of Banco do Brasil. The interim CFO position had been held by Carlos Alberto Rechelo, executive finance manager, following the departure of the previous CFO Sergio Caetano Leite, who left the company along with former CEO Jean Paul Prates.

Experts consider Mr. Melgarejo’s nomination the most sensitive. Concerns arise because the CFO is the second most important position in the company hierarchy after the chief executive officer. Selecting Petrobras’s executive team is the CEO’s prerogative, though historically, the state-owned company has often been subject to political appointments by the government and parties. The Lula administration is no exception.

Following the announcement, there was a nearly immediate interpretation that Mr. Melgarejo’s selection was politically motivated, given the current Previ administration’s close ties to the presidential office. For instance, during the succession of Vale’s CEO earlier this year, Previ was rumored to have played a key role in an unsuccessful attempt to install former minister Guido Mantega as head of the mining company, a move pushed by President Lula that led to a depreciation in Vale’s stock.

Petrobras and Previ did not respond to requests for comments on the criticisms.

Ms. Chambriard also nominated Sylvia dos Anjos as chief exploration and production officer and Renata Baruzzi as chief engineering officer. These appointments require approval through the company’s governance procedures and subsequently by the board of directors. If approved, the new executive team would be half female, with Clarice Coppetti currently being the only woman on the team, overseeing corporate affairs.

Former heads of exploration and production, Joelson Mendes, and engineering, Carlos Travassos, may be reassigned within Petrobras if the new nominees assume their roles, as they are long-serving employees of the state-owned company.

Analysts from banks and consultancies are concerned that Ms. Anjos and Ms. Baruzzi might lack the necessary business acumen for Petrobras’s executive positions. Although both are technical experts and long-time employees of the company, something appreciated by the market, they might lack corporate leadership experience. One source suggested that Ms. Anjos and Ms. Baruzzi are out of touch with Petrobras’s future direction. “Magda [Chambriard] is looking backward rather than forward. She’s selecting people from her time at Petrobras, between 1980 and the early 2000s,” said the source.

Ilan Arbetman, an analyst at Ativa Investimentos, sees Mr. Melgarejo’s nomination as a signal that the government intends to manage Petrobras according to its interests. “The volatile reaction in the stock explains this. For such a critical role as the chief financial officer, the government directly chose someone from Previ to shape the oil company in its own way,” said Mr. Arbetman. He believes this indicates the company may become less responsive to market demands.

Mr. Arbetman added that the position Mr. Melgarejo was nominated for requires more interaction with the private sector than he had at Previ: “His learning curve may be longer.”

*Por Kariny Leal — Rio de Janeiro

Source: Valor International

https://valorinternational.globo.com/