Why the market welcomed the nominations to Petrobras’ management team

The nominations made by Petrobras CEO Jean Paul Prates to form the Brazilian firm’s executive management team were well received by local analysts consulted by BNamericas.

The new head of the national oil company unveiled the five names on Thursday. 

Petrobras said in a statement that the nominations will go through an internal review before being presented to the board of directors. 

Prates’ picks

A chemical engineer, Claudio Schlosser was selected to take charge of the commercialization and logistics area. Working for Petrobras since 1987, he has experience in the areas of processing, commercialization and logistics.

Prates chose mechanical engineer Carlos Travassos to head the company’s production development. He has worked at Petrobras for 33 years and is currently executive manager of surface, refining, gas and energy systems. 

Also a mechanical engineer, Joelson Falcão Mendes was selected for the exploration and production area. Mendes joined Petrobras in 1987 as an equipment engineer and has held various managerial positions over the past 31 years

For refining and natural gas area, Prates picked William França, who is a chemical engineer that has worked for Petrobras since 1988. 

And IT expert Carlos Augusto Barreto was selected to become director of Petrobras’ digital transformation and innovation management. With a corporate career spanning 25 years, he has worked for the Federal Reserve and Mitsubishi’s US bank, and non-financial companies such as Charter Communications and Cushman Wakefield. 

Market reaction

For Fabrício Gonçalvez, CEO of Box Asset Management, the five are all highly qualified to help run Petrobras. 

“The fact that many of the candidates have backgrounds in areas such as engineering, finance, law, information technology, and business management shows that Petrobras is looking for professionals with technical and strategic knowledge to make up its leadership team,” he told BNamericas.  

Gonçalvez highlighted that most of them have been with Petrobras for many years and have proven leadership skills. “This may increase investor confidence as they will view the company as being more stable and prepared to face market challenges.” 

The fact that four of the five nominees are already Petrobras’ career employees brings a “strong baggage of experience” and a deep technical understanding of the business, said Signey Lima, an analyst at Top Gain.

For Lima, the market's biggest concerns continue to be political interference in the company’s management, and the potential withdrawal of the country’s import-parity fuel pricing policy (PPI). 

"By choosing career names instead of making merely political nominations, investors end up liking this," Lima told BNamericas. "It does not necessarily mean that the possibility of withdrawing the PPI has been extinguished, but any changes in the guidelines would tend to be gradual and with less of an immediate impact.” 

Mahatma Ramos dos Santos, a researcher at local petroleum studies institute Ineep, said the nominations could represent a starting point for potential changes in the corporate structure of the company. 

Like the other analysts, he highlighted that most of the nominations involve career employees, which reinforces the hypothesis that value is being placed on the technical knowledge that these professionals have accumulated at Petrobras.

“We still have to wait for the business strategy that will be designed by the new management and that will be the subject of dialogue between Petrobras’ presidency, the board, and the government, which is the majority shareholder,” Santos told BNamericas. 

Three more three nominations – for the areas of institutional relations and sustainability; finance and investor relations; and governance and compliance – are yet to be made by Prates.