Petrobras Names Interim CEO After Predecessor Resigns

SÃO PAULO—Brazilian oil firm Petróleo Brasileiro SA named Ivan Monteiro, the company’s chief financial officer, as interim chief executive officer amid growing concern about government meddling in the state-controlled company.

Former Chief Executive Pedro Parente resigned earlier in the day amid strong criticism by unions of his market-oriented price policy following a 10-day truckers strike that led the government to cut and temporarily freeze the price of diesel fuel, among other things, to end the disruptive labor action.

Mr. Monteiro joined Petrobras , PBR -14.59% as the company is known, in 2015 when he was hired by former Chief Executive Aldemir Bendine. Both men moved to the company from state-controlled lender Banco do Brasil SA, and Mr. Monteiro stayed on when Mr. Parente took over the top spot at the oil company in 2016.

Mr. Monteiro will continue to hold his positions as CFO and head of investor relations while Petrobras looks for a permanent CEO, Petrobras said in a statement.

In his resignation letter, Mr. Parente cited the intense criticism of his policy that set gasoline and diesel prices based on the cost of oil. The simmering complaints were amplified by the truckers strike, which blocked highways and cut supplies of food, fuel and medicines in much of the country to protest a recent rise in diesel fuel prices.

Brazilian President Michel Temer agreed to the fuel price cut and other concessions to get truckers back to work. Mr. Temer promised the government would compensate Petrobras for any losses resulting from the new measures, but his reassurances weren’t enough to convince investors, and the company’s preferred shares closed 14.9% lower on Friday.

Mr. Temer tried to calm markets again later Friday with a televised statement in which he promised not to interfere with the company’s price policy.

But the president’s concessions had already sparked worries the company would be subject to interference from the government, which under former President Dilma Rousseff had forced Petrobras to maintain artificially low fuel prices in order to keep inflation under control. Mr. Monteiro might not have the political capital necessary to resist any such pressure, according to Pedro Paulo Silveira, an analyst at the Nova Futura brokerage.

“Parente had backing from markets and political parties, and he ended up leaving,” said Mr. Silveira. “Now we have someone who doesn’t come with that kind of support, and at a time when trust in the company has already been shaken.”

Mr. Silveira praised Mr. Monteiro’s qualifications for the job, but said the interim CEO faces the same problems that drove out Mr. Parente. “The price policy at Petrobras will be questioned from now on,” said Mr. Silveira.

Pedro Parente, former chief executive at Petrobras, held a news conference in Rio de Janeiro last month. When he took the job, Mr. Parente faced the task of reducing debt of more than $100 billion, while regaining the confidence of investors. Photo: sergio moraes/Reuters

When Mr. Parente took the helm at Petrobras, he faced the task of reducing debt of more than $100 billion, while regaining the confidence of investors who had watched the company’s market value plummet amid a corruption scandal and the costly policy of maintaining low fuel prices to help keep inflation under control.

Mr. Parente told The Wall Street Journal in 2016 that he was given assurances by Mr. Temer’s government that there would be no political interference in the company.

“This will be a serious company…with the best management that we can have in this country,” Mr. Parente said then. “These are not small dreams that we have for this company. I would not have come here if it was not with a view to working to recover this company to its greatness.”

The Temer administration kept its word and let Mr. Parente run the company without interference until the country’s economy almost ground to a halt because of the truckers strike. Drivers were protesting an increase in fuel prices of about 30% since the start of the year, caused by the rising cost of oil and the weakening of the Brazilian real against the dollar.

To end the widespread disruptions to the economy, the government said Sunday it would cut taxes on diesel fuel, freeze the price 60 days and let them change once every month afterward.

The measures raised concerns that the government is now vulnerable to economic blackmail, said Luís Octavio Carvalho da Motta Veiga, a former Petrobras president.

Mr. Parente’s resignation “was inevitable after he could no longer set the pricing policy. The solution (to another strike) will be lowering prices to avoid shutting the country down again” he said.

—Paulo Trevisani in Brasília contributed to this article.

Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com and Luciana Magalhaes at Luciana.Magalhaes@wsj.com

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