[BRASILIA] Petroleo Brasileiro SA will be led by veteran business executive Pedro Parente, as the state-controlled oil producer struggles to reduce debt and navigate the fallout from the country's biggest corruption scandal.
Mr Parente, who is currently the chairman of BM&F Bovespa SA, the operator of Latin America's biggest securities exchange, accepted an offer from acting president Michel Temer to become Petrobras's third chief executive officer in less than two years, the president's press office said in a text message.
While Mr Parente has never run an oil company, his experience in business and government has won praise from investors and fits with Mr Temer's plan to form an economic team that can restore growth to Latin America's largest economy.
Mr Parente was previously the president of agribusiness giant Bunge Ltd's Brazil unit and chief operating officer of multimedia company Grupo RBS. He was also an energy minister under former president Fernando Henrique Cardoso, where he gained experience managing a national crisis when he oversaw energy rationing during a 2002 drought.
"It's a good appointment, and could generate sentiment that things are moving in the right direction," said Lucas Brendler, an analyst at Geracao Futuro Corretora in Porto Alegre, Brazil.
"He's an experienced executive. There seems to be a light at the end of the tunnel."
The company is in the midst of an asset disposal program that has resulted in sales of about US$2.1 billion since last year. Mr Temer is expected to accelerate privatisations, including the possible sale of Petrobras's fuel distribution business, to help close the budget deficit and win the confidence of investors, a government official with direct knowledge of the matter said this week.
He enters the job at a difficult time. The company may need government support as early as 2017 if it fails to raise a planned US$14.1 billion from asset sales this year, Moody's Investors Service said in a research report Thursday.
Petrobras may also have difficulties refinancing an estimated US$21 billion of debt coming due by the end of 2017 given its limited access to capital markets, Moody's said.
Rio de Janeiro-based Petrobras is also defending itself against a class action lawsuit in the US, a source of concern for investors who have already seen the company report billions of dollars in graft-related losses and impairments from unprofitable investments, including refinery projects that remain unfinished.
The host of financial and legal challenges facing the company had discouraged some Brazil's leading oil executives from seeking the job.