A Court Ruling Suspends Petrobras Chairman Amid Allegations of Conflicts of Interest

A court ruling in São Paulo has suspended Pietro Mendes, the government-appointed Chairman of Petroleo Brasileiro SA, citing alleged conflicts of interest. Mendes, who also serves as the secretary of oil and gas in Brazil’s Mines and Energy Ministry, was deemed by the court to potentially influence decisions at Petrobras due to his dual roles. Both Petrobras and the government have expressed their intentions to contest the decision.

Mendes’s appointment by Mines and Energy Minister Alexandre Silveira has been part of an ongoing power struggle with Petrobras CEO Jean Paul Prates regarding the allocation of company funds. This conflict intensified when Mendes and other government-appointed Board members opposed the payment of extraordinary dividends, causing market turbulence.

The court’s decision, if upheld, may necessitate the government finding a replacement for Mendes before the upcoming April 25 shareholders meeting, further complicating the leadership situation. Despite the ruling, Silveira affirmed his support for the current candidates for Petrobras’s Board and emphasised Mendes’s continued potential contributions.