(Bloomberg) -- Petroleo Brasileiro SA jumped on news that its chief financial officer is taking over as interim CEO, offering some continuity to investors rattled by political pressure at the state-controlled oil producer.
Ivan Monteiro was named after the resignation Friday of Pedro Parente, as Brazilian politicians called for a chief executive officer more focused on the good of the nation than pleasing the market. He’ll be nominated for a board vote as a permanent replacement, Brazil President Michel Temer said on Friday.
Petrobras rose as much as 8.5 percent in Sao Paulo, after a tumultuous week that saw shares rise and fall by double digit percentages. Shares are still down by a third since a trucker strike protesting high fuel prices brought the Brazilian economy to a halt.
While Monteiro has gained Temer’s nod for a permanent job, “everyone is a placeholder,” with a presidential election looming in October, said Fernando Valle, a Bloomberg Intelligence energy analyst in New York.
The Parente resignation “was about appeasing a little bit of the ill will that had built against Petrobras” in the community, Valle said. “By naming Ivan as successor, they are trying to say ‘we are going to keep the same policies, within reason.’ Most of all it shows continuity.”
Temer has said the company will retain its autonomy in setting fuel prices under Monteiro. Investors have been concerned that Petrobras won’t be fully compensated for subsidizing diesel prices, despite reassurances from the government and company.
Parente’s resignation highlights the erosion of support for market-friendly policies after two years of austerity under Temer.
Monteiro has been “intimately involved" in changes at Petrobras, Valle said. “It’s fair to say that Pedro was the lead and potentially the architect, and Ivan was doing the executing, be it on the financial front of renegotiating loans or closing some of the deals."
Monteiro has been CFO since 2015 and previously served in the same role at Banco do Brasil SA. Since joining Petrobras, he oversaw a reduction in the company’s total debt, resumed regular financial statements after reaching an agreement with auditors and successfully extended the company’s debt payment schedule.
In December, he led the initial public offering of Petrobras Distribuidora SA, the country’s biggest IPO since 2013.
Despite today’s rally, “I don’t think promoting this guy changed anything," said Muhammed Ghulam, a Raymond James & Associates analyst in Houston. “The government has shown that when push comes to shove, they will side with consumers over whatever is best for Petrobras and its investors."
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