Board member questions changes at Petrobras amid elections

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The first change in Petrobras’ board during the Caio Paes de Andrade administration, the appointment of the company’s new director of Digital Transformation and Innovation, Paulo Palaia, was rejected by three independent directors of the state-owned company.

The minority representative Francisco Petros and the workers’ representative, Rosângela Buzanelli, questioned Palaia’s lack of experience for the position, who is responsible for managing the state-owned company’s research and technological development center, Cenpes.

Petros also questioned the convenience of the change in the midst of the election period, as the company’s governance may undergo “substantive changes” depending on the outcome of the polls. “In terms of convenience and opportunity, there seems to me to be no justification for such a change.”

Councilor Marcelo Mesquita, who also represents minority shareholders, was the third vote against the appointment, but his justification was not published in the minutes of the meeting, released by Petrobras this Monday (3). The other eight councilors, more aligned with the government, voted in favor.

Palaia is close to the Bolsonaro family and was appointed to replace Juliano Dantas, a career employee at the state-owned company who took over the board in December, during the Joaquim Silva e Luna administration. He has experience in the field of information technology and has worked for Gol and Webjet airlines.

“Despite his vast experience, the professional has not worked in an organization as complex and capable of developing new technologies as Petrobras,” said Buzanelli, in his vote at a board meeting held on September 21.

Paes de Andrade assumed the presidency of Petrobras at the end of June, with the mission of giving “new dynamics to fuel prices”, according to President Jair Bolsonaro (PL). Since then, he has accommodated government and army allies in state-owned positions.

In addition to Palaia, he appointed Colonel Luiz Otávio Franco Duarte, who served under the command of General Eduardo Pazuello at the Ministry of Health, as advisers to the presidency, and retired military officer Mario Pedroza da Silveira Pinheiro.

The appointments follow a major change in the company’s board of directors, which is now made up mostly of holders of public positions aligned with the government, such as Ciro Nogueira’s number two in the Civil House, Jônathas Assunção.

To break down resistance to new nominees, the new board changed the structure of the committee responsible for evaluating CVs, removing representatives of minority shareholders, such as Petros, who had been voting against the government, from the group.

“Mr. Juliano Dantas has been presenting an exceptional performance in this board, having brought to this area an air of modernity and innovation”, stated Petros, in his vote against Palaia. “Most likely this professional will leave the company. I’m sorry, for the company and for the person.”

“Finally, we are in a period in which there may be substantial changes in the company’s governance, as a result of the possibility of changing the controller depending on the electoral period. I believe that this is a relevant factor for changes of this order”, he added.

Buzanelli expressed concern with the management of Cenpes, from which, for example, technologies that led Petrobras to global leadership in the exploration and production of oil in ultra-deep waters emerged.

“It is a cause of great concern not only for this counselor, but also for most of Petrobras’ technical staff, the directions given to Cenpes, especially the conduction of Research and Development projects,” he said.

Since the troubled change of command that took Paes de Andrade to the helm of the company, representatives of minority shareholders accuse the company’s management of weakening governance and acting in the campaign for Bolsonaro’s reelection, by announcing price cuts almost weekly.

In his first appearance at a public event, last week, the president of the state-owned company made a political speech, praising the government and stating that Petrobras “does not want a setback”. “Like Brazil, Petrobras got back on its feet, Petrobras wants to move forward,” he said.

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