By Paul Kiernan
RIO DE JANEIRO--Brazilian state-run energy giant PetrĂ³leo
Brasileiro SA underwent a board shake-up late Wednesday that went
mostly as expected, with its interim chairman being replaced by the
chief executive of the country's top mining company.
Vale SA CEO Murilo Ferreira, a career mining executive who
reportedly enjoys the confidence of Brazilian President Dilma
Rousseff, was elected by the government and state-run banks to the
helm of Petrobras' board at its annual shareholders' meeting.
Seven of Petrobras' 10 board members are chosen by the
government, which controls roughly 60% of the company's voting
shares either directly or through public banks. Of the remaining
three, two are chosen by minority shareholders and one is elected
by Petrobras workers.
Government-imposed decisions, such as building costly refineries
and subsidizing domestic fuel prices, have been widely blamed for
straining Petrobras' finances and obliterating its share price in
recent years.
It is unclear whether the new board will allow the company to
operate more independently.
But in a break from recent tradition, the board includes no
high-ranking government officials. Prior to the interim board that
took over in March amid a continuing corruption scandal, Petrobras'
board included two Brazilian government ministers, a deputy
minister and an army general.
The general, Francisco Albuquerque, had been expected to remain.
But at Wednesday's shareholder meeting, the government removed his
name from the ballot, along with two of its other expected
nominees.
It replaced them with two academics--Segen Farid Estefen and
Luiz Nelson Guedes Carvalho--and Roberto Castello Branco, Vale's
former chief financial officer.
In a conference call with reporters Thursday following the
release of Vale's first-quarter earnings, Mr. Ferreira praised all
three men for their accomplishments in the fields of subsea
technology, accounting and corporate governance, and shareholder
relations, respectively. He added that another of the
government-chosen board members, Luiz Navarro, is among Brazil's
most respected experts on corporate compliance.
Mr. Ferreira said Petrobras's board reflects "the
depoliticization of the company, and it is being proven in each
field."
"We need to resume the normal course of business because it's
not just Petrobras that is being hurt," Mr. Ferreira said of the
company's problems. "I think it is Brazilian society as a whole
that is suffering."
The two board members elected to represent minority shareholders
are Walter Mendes de Oliveira Filho and Guilherme Affonso Ferreira.
Both had been endorsed by proxy advisory service Glass Lewis &
Co., which described them as "truly independent" candidates in a
paper released to Petrobras shareholders earlier this month.
Write to Paul Kiernan at paul.kiernan@wsj.com
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