Last weekend, the government indicated the name Luis Rodolfo Landim Machado, known as Rodolfo Landim, for chairing the Petrobras Council (PETR3;PETR4), in a decision considered controversial by some market analysts.
They highlighted an experienced Lacy look for the job. However, due to his closeness to President Jair Bolsonaro, the appointment was viewed with reservations.
Levante Ideias de Investimentos explained that Landim had been an employee of Petrobras for 26 years and had become president of former BR Distribuidora, today Vibra (VBBR3), but the appointment can be seen as a way to increase the government’s influence over the state-owned company, given the CEO’s closeness to President Bolsonaro.
The regular general meeting that will determine the new names of the Board of Directors is scheduled for April 13, and three members of the Board of Directors will be ending their terms of office, including the term of the current president, Admiral Eduardo Basilar.
Bradesco BBI does not believe the Admiral’s departure has anything to do with the issue of Petrobras’ price adjustment at this time. For the bank, “although part of the market has some doubts” regarding Landim’s name, his name, according to the foundation, is quite technical.
Morgan Stanley assesses that the government’s appointment of Rodolfo Landim, at a time when Petrobras needs to consider important business decisions, including fuel prices with the war situation in Ukraine, “may raise concern among investors.”
However, the corporation informed that pricing policy is not the prerogative of Petrobras’ board of directors: “But any potential interference in the company’s strategy would actually begin at the board level, where the controlling shareholder (in this case, the federal government) can exercise its control.
XP also highlights that due to his closeness to President Bolsonaro, this is “raising the banner of how he can interfere with Petrobras’ pricing policy.”
Itao BBA highlighted that “although we consider its extensive experience in the oil and gas sector as positive, we expect a neutral reaction from the market, as we believe that this announcement does not mean any change in Petrobras’ current strategy.” The bank has an outperformance recommendation (a performance above the market average) for PETR4, with a target price of R$38.00.
XP and BBI also have an equivalent buy recommendation for state-owned assets, while Morgan’s recommendation is equal (exposure in line with market average, neutral equivalent).
Between a solid career and a scandal
Rudolf Landim, Civil Engineer, holds a Graduate degree in Business Administration from Harvard University and a specialist course in Petroleum Engineering from the University of Alberta, Canada.
In Petrobras, where he spent 26 years, he was the managing director of Natural Gas, as well as the head of the two subsidiaries Gaspetro and Distribuidora.
After leaving Petrobras, Landim headed OGX Petróleo e Gás and OSX Brasil. He is the co-founder and controlling shareholder of Ouro Preto Óleo e Gás and Managing Partner of Mare Investimentos. He has chaired the Clube de Regatas do Flamengo since 2019.
Last year, the Federal Public Ministry denounced Landim for his fraudulent management of a private equity fund between 2011 and 2016. In parallel, in an account in Landim at Credit Suisse, the Swiss authorities found suspicions of irregularities in financial transactions.
More names nominated for councils
On Saturday, the state-owned company also published the names of 14 candidates nominated by the government for the company’s board of directors and finance.
The list of candidates for the Board of Directors includes Rodolfo Landim, the presidential candidate, in addition to the current president of the oil company, Joaquim Silva e Luna, Carlos Eduardo Lisa Brandao, Luiz Enrique Caroli, Marcio Andrade Webber and Murillo Maroquim de. Souza, Roy Flack-Schneider and Sonia Julia Sulzbeck Villalobos.
For the Finance Council, the candidates for the Ministry of Mines and Energy are Agnes Maria de Aragão da Costa as a member, with Marisete Fátima Dadald Pereira as an alternate, and Sérgio Henrique Lopes de Sousa as a member, with Alan Sampaio Santos as an alternate member. Representatives of the National Treasury are Janet Duarte Moll as junior member and Otavio Ladera de Medeiros as substitute.
The change in Petrobras’ board of directors comes at a time of great pressure on the company’s president, Joaquim Silva e Luna, due to fuel prices, which, although high, are not keeping pace with global oil fluctuations, caused by the war in Ukraine. .
According to Levante, at the Ordinary General Assembly, which will determine the board, a great deal of scrutiny is expected in Landim’s nomination.
In any case, pressure on Petrobras is increasing. The sudden rise in oil prices, which is theoretically beneficial for the company, is not overtaken, adding to the delay in fuel prices. According to the Import Parity Price Policy (PPI), Petrobras must pass this increase along the chain, so that importers are not harmed by unfair competition, as they buy products at international market prices. If there is no transfer of prices, there is a risk that there will be a shortage of products in the local market or the country ‘bank’ this
Disagreement with its balance sheet, as in previous years with the company on the verge of bankruptcy. With transportation, political and societal pressure rises, due to higher fuel prices for consumers,” the research house highlights.
(with Estadao content)
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