Magda Chambriard, New CEO of Petrobras, is Accused by Lula of Boosting Job Creation - Latest Global News

Magda Chambriard, New CEO of Petrobras, is Accused by Lula of Boosting Job Creation

By Marta Nogueira, Sabrina Valle and Rodrigo Viga Gaier

RIO DE JANEIRO (Reuters) – Petrobras’ next chief executive, Magda Chambriard, comes with the resume and mandate to make Brazil’s state oil company what it was under previous Workers’ Party governments: an engine for job creation and the industrial development, she told people familiar with the matter.

President Luiz Inacio Lula da Silva – who used Petrobras to advance domestic shipbuilding and major refining projects during his previous 2002-2010 presidency – has tasked the four-decade oil industry veteran with revitalizing that vision, sources said.

Petrobras shares plunged on Wednesday after news of the CEO swap broke, as investors balked at the prospect of increased capital spending that could mean foregoing the generous dividends of recent years.

The restructuring at Petrobras has also resulted in the departure of its chief financial officer and is expected to affect other executives as well. It could also undermine former CEO Jean Paul Prates’ plans for offshore wind projects and a long-term transition to renewable energy.

Chambriard started in the industry in 1980 as a Petrobras engineer and led Brazil’s oil and gas regulator ANP from 2012 to 2016. It will seek to breathe new life into domestic shipyards, fertilizer plants, refineries and gas pipelines, three sources with knowledge of the matter said.

Reuters could not reach Chambriard for comment. She has made no public comments since her appointment.

Brazil’s struggling shipbuilding industry will be their top priority, a source at Petrobras said, citing Lula’s frustration with Prates’ failure to revive the job-intensive sector. Chambriard and Lula discussed proposals to create jobs in shipbuilding in at least three private meetings, a source close to Chambriard said.

The same source said that no plan to make changes to the company’s dividend policy emerged from the meetings between Lula and Chambriard. Another of Lula’s gripes: The president has publicly complained that the company pays too much to shareholders but doesn’t invest enough in Brazilian industry.

With an expected increase in investments, dividends to shareholders would naturally fall, the source said.

According to Allan Kardec, a former ANP director who worked closely with Chambriard at the agency for about four years, Chambriard was ANP director under former President Dilma Rousseff, Lula’s Workers’ Party successor and her personal friend.

Chambriard will likely focus on expanding oil exploration and production at Petrobras, Kardec said.

He praised Chambriard’s strong technical background and said she shared a vision for Petrobras – where she worked for more than 20 years – with Lula and the Workers’ Party. Petrobras workers’ union FUP praised her appointment and said she shared her views on the need to strengthen Brazil’s shipbuilding industry and expand local refining capacity.

Kardec and Guilherme Papaterra, who also worked with Chambriard at ANP, both said they expect her to step up controversial oil exploration efforts in the offshore Foz do Amazonas basin, part of the so-called equatorial margin.

The area is considered Brazil’s most promising frontier for oil exploration because it shares geological similarities with nearby Guyana, where Exxon is developing vast fields. However, environmental agency Ibama has denied a drilling license in the area, citing concerns about the impact on the region’s delicate biome and indigenous peoples.

Chambriard will bring a more “technical perspective” to the debate, Papaterra said. “In this Ibama discussion, in this issue of Foz do Amazonas… she has authority.”

(Reporting by Marta Nogueira and Rodrigo Viga Gaier in Rio de Janeiro, Sabrina Valley in Houston; Writing by Fabio Teixeira; Editing by Brad Haynes and Rosalba O’Brien)

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