Petrobras' board of directors named a new chief executive on Friday, choosing the head of the nation's Banco do Brasil to take charge of the state-run oil company following a shake-up over a massive kickback scheme.
The selection of Aldemir Bendine, announced on Petrobras' website, failed to impress some analysts, who described the banker as "underwhelming." Shares of Petrobras dropped 6.8 per cent in late trading Friday.
Bendine, who has led Banco do Brasil since 2009, replaces Maria das Gracas Foster, who resigned under pressure as investigators continue unearthing a long-running kickback scheme at Petrobras. Investigators have found the oil company awarded inflated contracts to construction and engineering firms, which in turn paid back at least $800-million. Prosecutors say some of that money was funnelled into the campaign coffers of the ruling Workers' Party and its allies.
Bendine is seen as being close to President Dilma Rousseff, but is not well-regarded in business circles.
Joao Neves, Latin America director with U.S.-based Eurasia Group, said Rousseff's choice of the veteran banker is not impressive.
"The new leader at Petrobras needs to be somebody with market credentials, but also someone who is politically savvy and has the trust of the president," Neves said. "Bendine has much more of the latter."
He said that ultimately "the market will give him the benefit of the doubt, but the fact [Rousseff] chose an underwhelming name without market credentials will make the process of Petrobras regaining market credibility longer."
Because of the daunting challenges facing the debt-plagued oil firm, Neves said "it's quite possible that Dilma had other names she wanted to choose, but that they wouldn't take the job."
Petrobras is Brazil's biggest company and it's being counted on to develop massive offshore oil fields discovered in recent years off the Rio de Janeiro and Sao Paulo state coasts. The fields could hold upward of 100 billion barrels of oil, which leaders hope would propel Brazil into developed world status.
Rousseff often has referred to the oil as Brazil's "passport" to a better future, to funding rapid improvements in education, health and other crucial areas.
But Petrobras has lost billions in market value in the past year as it faces daily reports on the extent of the corruption scheme, which prosecutors say operated for well over a decade and allegedly saw millions funnelled into the campaign coffers of the Workers' Party and its allies.
Charges are expected to be filed soon against dozens of politicians, including several congressmen.
Carlos Lopes, a Brasilia-based analyst at the Instituto Analise consulting firm, said that the "recovery of the company's credibility is the key challenge Petrobras' new president will have to tackle."
"The government will have to give him the conditions to manage the company transparently and in an autonomous way," he said. "The government has to stop being so interventionist."