Petrobras CEO Steps Down Amid Corruption Scandal

CEO Maria das Graças Foster and other senior management at Brazil's Petrobras, parent company of chemical producer Braskem, resigned on Feb. 4 amid a corruption scandal. Resigning along with Foster were CFO Almir Barbassa and the heads of the gas and energy, exploration, refining and engineering divisions.

Pressure on Foster to step aside had been mounting since Petrobras released unaudited quarterly results in mid-January that did not include corruption-related write-downs.

Petrobras' board of directors was to meet on Feb. 6 to elect a new management team to replace the executives, the oil group said in a securities filing.

Reports said most replacements would likely come from within the group; however getting business back on track with accounts certified by auditors could require an experienced CEO, possibly from outside the oil business, sources told the news agency Reuters.

Names rumored to be under consideration for CEO include former banker and central bank governor Henrique Meirelles; former chief executive of iron-ore miner Vale, Roger Agnelli: current Vale CEO Murilo Ferreira; former Petrobras and OGX executive Rodolfo Landim, along with former Braskm CEO José Carlos Grubisich.

Investors are said to hope a more market-friendly leadership team at Petrobras will help the firm regain credibility and ramp up production and boost profit.

Along with Foster, the Petrobras scandal has also shed critical light on Brazilian president Dina Rousseff, who chaired the oil producer's board from 2003 to 2010. Foster became CEO in 2012, just over a year after Rousseff became president of the country, reports said, while hinting at close ties between the two women.

The corruption schemes that included price-fixing, bribery and political kickbacks said to benefit Rousseff's Workers' Party and other parties within the ruling coalition, date from the mid-2000s when Rousseff was chair. They allegedly continued under Graças Foster's leadership.

Both Rousseff and Foster have denied any knowledge of the scam, which is believed to have diverted anywhere between $3.7 billion and more than $28 billion from Petrobras' coffers. Neither has been charged with wrongdoing. However, three former Petrobras directors and three dozen others, including executives from major engineering firms, have been arrested, news agencies said.