FILE PHOTO: The logo of Brazil’s state-run Petrobras oil company is seen on a tank in at Petrobras Paulinia refinery in Paulinia, Brazil July 1, 2017. REUTERS/Paulo Whitaker/File Photo
April 18, 2019
By Marta Nogueira, Rodrigo Viga Gaier and Luciano Costa
RIO DE JANEIRO/SAO PAULO (Reuters) – Brazilian state-run oil firm Petroleo Brasileiro SA hiked diesel prices on Wednesday, and executives said the firm could expand its already aggressive divestment plan while arguing the company was completely free of political interference.
In an impromptu news conference at the Rio de Janeiro headquarters of Petrobras, as the company is known, Chief Executive Roberto Castello Branco announced a diesel price hike of 10 cents per liter and said Petrobras has complete control over its pricing strategy.
Speaking only minutes before at an event in Sao Paulo, Chief Financial Officer Rafael Grisolia said Petrobras was looking at selling off assets such as deepwater pipelines and Petrobras Distribuidora SA, which includes a gas station chain stretching across the country.
The comments come as executives scramble to contain the fallout from the company’s cancellation on Friday of a diesel price hike at the behest of Brazilian President Jair Bolsonaro, stirring fears of political interference and tanking Petrobras shares.
While Bolsonaro´s government has promised a hands-off approach to Petrobras, investors are wary of a return to policies enacted under past administrations, in which the company was forced to sell fuel at a discount to international rates.
On Tuesday, Bolsonaro´s spokesman and Economy Minister Paulo Guedes sought to characterize the canceled price hike as a one-time error that would not be repeated.
According to an information posted on Petrobras’ website, the company increased the price of diesel at refineries by 4.7 percent after canceling a 5.7 percent increase on Friday.
Castello Branco said Petrobras “rigorously” keeps its prices in line with international rates and has no plans to change its policy of adjusting fuel prices every 15 days.
PIPES AND PUMPS
Petrobras is analyzing the best model for selling three offshore natural gas pipelines, Grisolia said, including whether they will be sold individually or in a package.
Grisolia said the company would “probably” reduce its stake in Petrobras Distribuidora to below 50 percent from the current 71 percent, effectively privatizing the unit through a secondary share offering.
Investors have cheered Petrobras’ recent push to cut debt and refocus on oil exploration and production via an aggressive divestment program.
Reuters reported earlier this month that Petrobras was preparing to sell three more gas pipelines after successfully selling its larger TAG unit to France’s Engie for $8.6 billion.
Reuters reported on Tuesday the company had hired nine banks to manage Petrobras Distribuidora’s share offering.
(Reporting by Marta Nogueira and Rodrigo Viga Gaier in Rio de Janeiro and Luciano Costa in Sao Paulo; Writing by Gram Slattery and Tatiana Bautzer; Editing by Peter Cooney, Cynthia Ostermanand Leslie Adler)
