New Petrobras Head Pledges Investor Returns After CEO Upheavel

(Bloomberg) — The new CEO of Brazil’s Petrobras has tried to soothe investor concerns about ramping up investments during her first public comments at the helm of Latin America’s biggest oil producer.

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Magda Chambriard was formally appointed to the role last week at a time of growing concern from investors about government intervention in Petroleo Brasileiro SA. Her predecessor was fired due to a dispute over the amount of dividends the company paid instead of using the money for investments.

“Petrobras is perfectly capable of guaranteeing returns for its shareholders, whether private or governmental,” Chambriard said Monday in her first public comments as CEO. “I understand we need to make a profit.”

President Luiz Inacio Lula da Silva has made it clear that he would like state-controlled Petrobras to spend more money on expanding in sectors including refining and creating jobs. The government controls the oil producer’s board through a majority of voting shares.

Under Lula, Petrobras has already shifted from the previous administration’s focus on streamlining operations to cut costs. The company has called off a program to sell a group of refineries and may even buy back some of the facilities that were sold under previous management.

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Chambriard — a former head of Brazil’s oil regulator — said the company needed to accelerate exploration off Brazil’s coast, including the Pelotas Basin and a region known as the equatorial margin near the border with French Guiana.

She has criticized licensing delays for drilling at an environmentally sensitive site in the equatorial margin, saying they are leaving the nation without a source of growth after its top-oil producing basin, the pre-salt, declines.

“We have to be very careful with replenishing reserves, unless we want to accept the fact that we could become importers again,” she said.

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On domestic fuel costs, Chambriard said that Petrobras will continue to work to shield consumers from short-term dips and swings in oil prices. After Lula took office in 2023, Petrobras changed its pricing policy to focus more on production costs rather than international price levels.

–With assistance from Beatriz Amat.

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