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Petrobras fallout has widening impact in Brazil

Thursday, March 5, 2015

Significance

State-controlled oil company Petrobras's CEO, Maria das Gracas Foster, and five senior executives resigned on February 4 in the wake of the so called 'Carwash' corruption investigation. On February 6 the Petrobras board appointed Aldemir Bendine, head of state-controlled Banco do Brasil, as the new CEO. Poorly received by markets, he will have to address the fallout from the scandal while trying to minimise the impact on the company's massive development programme.

Impacts

  • There is no end in sight yet for the case, and the political and economic damage will worsen in coming months.
  • New management must ensure that Petrobras can deliver on development commitments, key to Brazil's future prosperity.
  • Rousseff will need to satisfy public demands for accountability while seeking to limit damage to her political allies.
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