Maria das Graças Silva Foster started at Brazil’s state-run oil company as a college intern more than 30 years ago. Now, as Petrobras ’s chief executive she is facing pressure to step down. Petroleo Brasileiro SA, as it formally known, is in the midst of a multibillion-dollar corruption probe that has ensnared three former executives and more than 20 executives from Brazil’s biggest construction companies. The scandal has been a hot potato for the administration of recently re-elected President Dilma Rousseff.
Brazilian Vice President Michel Temer on Tuesday told reporters during an event in Rio de Janeiro that Ms. Rousseff “will look into what’s best” regarding Ms. Foster’s tenure. Ms. Rousseff and Ms. Foster are known to be good friends. A spokesman for Ms. Rousseff declined to comment.
Petrobras shares have fallen to their lowest level in a decade, hit by the corruption scandal and a slump in global oil prices. Shares closed at $6.28 in New York on Tuesday. Four months ago, they were trading above $20.
Since the scandal erupted in March, Petrobras and Ms. Foster have maintained they were victims of the alleged corruption and werent aware of it until police made their first arrest in the case. Prosecutors havent implicated her in any of their indictments of former Petrobras executives. The company declined to comment for this article and has declined requests for an interview with Ms. Foster.
A chorus of senior government officials, politicians and analysts say the scandal is an embarrassment for Brazil and a major distraction for the company, which has twice delayed its third-quarter earnings report. Brazil’s prosecutor general said this month that top management of the company should be replaced.
“A way to return the credibility of the company is by appointing new directors, new executives,” said Mendonça Filho, a politician with the opposition Democrats party, also known as DEM.
Prosecutors in Brazil allege that several former Petrobras executives colluded with construction companies to overcharge Petrobras for work contracts and pocket millions of dollars for themselves. They also allege that some of the money ended up in the pockets of politicians in Ms. Rousseff’s Worker’s Party and other major political parties. Representatives from the Worker’s Party have denied this claim. So far, 36 people have been charged with crimes including money laundering and fraud.
Ms. Foster, 61 years old, was appointed chief executive in early 2012. She grew up poor in a Rio de Janeiro favela, or slum, and recycled cans as a child to pay for her education.
Investors were encouraged by her appointment. A chemical engineer, Ms. Foster is widely respected for her technical knowledge.
“You can ask her, ‘How much oil does this particular platform extract per day?’ and she’ll give you the number,” says Sergio Lazzarini, an economist at Brazilian business school Insper.
But while output has increased on Ms. Foster’s watch, the corruption scandal has spooked investors. The U.S. Department of Justice and U.S. Securities and Exchange Commission are investigating Petrobras, whose shares trade in New York.
With oil prices tumbling, Petrobras is facing a cash squeeze. The company said on Friday it will scale back ambitious offshore oil exploration and production efforts. The world’s most-indebted oil major, Petrobras says it has enough capital to operate for the next six months. But Brazil’s government has taken steps to guarantee its debt should the company need to borrow sooner.
“Maybe a new face could give a breath of fresh air to the company,” said Ricardo Bedregal, an analyst at consultancy IHS in Rio de Janeiro. “Even though [the corruption scandal] might not be her fault, people are looking for someone to blame.”
Fonte: The Wall Street Journal Online – 17/12/2014