Brazil's Petrobras Confirms New Board Members

RIO DE JANEIRO--Brazilian state-run energy giant Petróleo 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.

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 [e-mail]

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