The president of Brazil named Pedro Parente chief executive officer of state-led oil company Petroleo Brasileiro SA. It was a move by interim Brazilian President Michel Temer to revamp economic policy and shore up the debt-laden oil producer.
Parente is best known for his role as chairman of the Brazil unit of agribusiness and commodities-trading giant Bunge Ltd from 2010 to 2014. Bunge is Brazil’s largest grains exporter.
Parente, who was also chief of staff for President Fernando Henrique Cardoso, replaces Aldemir Bendine, according to a presidential spokesperson. Bendine had been running Petrobras since January 2015. Parente will become the third head of the firm in the last 16 months.
The appointment is a reunion of sorts as Parente sat on the board of directors of Petrobras 14 years ago. Under former Brazilian President Cardoso, Parente played an integral role in to international investment and competition after the administration ended Petrobras’ monopoly over exploration and production in 1997.
In the first quarter this year, Petrobras posted a net income of -$320.3 million (in U.S. dollars), on revenue of $18.1 billion. Petrobras is currently carrying $115.7 billion in debt and has a debt to EBITDA ratio of 5.6 times.
Oversaw Electricity Rationing During Energy Crisis
From 1999-2002 he also served as Cardoso’s chief of staff and managed a severe energy crisis that required electricity rationing and the quick building of supplementary power stations. He also helped manage a reduction of the government’s stake in Petrobras.
Petrobras has long been one of the largest employers in Brazil with more than 80,000 employees. Parente will be tasked with bringing normalcy back to the oil giant following a wide spread corruption scandal, depleted oil prices, and the company’s giant accumulation of debt.
Petrobras has said it plans to cut 12,000 jobs by 2020 to reduce costs and remain competitive. The company has reported losses for the last two financial years, is expected to spend $1.23 billion on implementing the job cuts.
He told reporters that he had accepted the job on condition that Mr. Temer promised not to nominate any political appointees to executive positions. In the recent past, this practice has led to corrupt overinflated deals that caused financial damage to the company, according to a report by BBC.
