UPDATE 2-Petrobras board confirms CEO, chooses insiders to fill top posts

(Adds confirmation by Petrobras)

RIO DE JANEIRO, April 15 (Reuters) - The board of Petrobras has elected four career executives to head up key company divisions rather than bringing in more outsiders, Brazil’s state-controlled oil company said on Friday, confirming news previously reported by Reuters.

The board of directors of Petroleo Brasileiro SA, as the company is formally known, met on Friday to officialy confirm Joaquim Silva e Luna as chief executive officer, and to vote on the new division heads.

The four new executive directors - a position equivalent to vice-president - have had long careers at the oil producer and were part of the company’s pre-existing succession plan.

Luna’s decision to endorse seasoned company executives sends a message of some continuity to a market wary of non-expert appointments to lead the company.

Brazil’s President Jair Bolsonaro announced the 71-year-old Luna would take the helm of Petrobras in a Facebook post in February. Luna served as Brazil’s defense minister in 2018. He is the first military man to run Petrobras since the 1980s.

Half of the company’s eight-seat executive director were left vacant after four divisional heads left the company following previous CEO Roberto Castello Branco, who was fired by Bolsonaro in February in a dispute over fuel prices. He officially ended his term on Monday.

Chief Accounting and Tax Officer Rodrigo Araujo was named chief financial officer.


Executive manager of Commercialization Claudio Mastella was made head of the logistics and commercialization department, in charge of fuel prices, a sensitive topic for Petrobras.

Executive manager Fernando Borges, who led the massive Libra field offshore project, will head the Exploration and Production division.

Joao Henrique Rittershaussen was elected executive director for the Production Development division. He was an executive manager of the same department.

In the past, both Borges and Rittershaussen have publicly criticized nationalistic rules implemented during the Worker’s Party governments to promote platform construction in Brazil by local builders. Petrobras has recently decided to resume platform construction overseas.

A retired general with no experience in the oil sector, Luna was the latest in a slew of active duty and former military men with whom Bolsonaro has surrounded himself since he took office.

Castello Branco’s sacking after hiking fuel prices more than 30% within a couple of months sent jitters through financial markets.

Fuel prices remain a sensitive topic for investors after Petrobras lost $40 billion between 2011 and 2014 as the government, which controls a majority of the company’s voting shares, forced it to subsidize local pump prices.

Reporting by Sabrina Valle and Marta Nogueira in Rio de Janeiro Additional reporting by Rodrigo Viga in Rio de Janeiro Editing by Kenneth Maxwell, David Holmes and Marguerita Choy