Petrobras critic named chief of Brazil's state-run oil giant

Five ways Brazil's Lula can reset green policy as presidentPrates is viewed as a moderate member of the left-wing Workers' Party, and his career in the senate will help him manage an oil company that regularly comes under political pressure to contain fuel prices and create jobs.In recent years Petrobras has won praise from investors for focusing on its most profitable oil projects in deepwater of the South Atlantic, while selling off lower-margin assets such as pipelines, refineries and mature oil fields on land. The strategy has allowed it to slash its debt and ramp up dividend payments. Financial markets are concerned profits will plummet under Lula as he directs the company to invest in other areas more aligned with his wider industrial policies. "All oil companies are turning into energy companies, and it isn't just talk," Prates said at a press conference earlier this month. "None of this is happening at the right scale at Petrobras." Newsletter Daily SA Money Daily The biggest business, economic and market news of the day. Sign up

Prates was a point person on Lula's energy team during the campaign and was in charge of talking to investors about oil and energy. He worked in Petrobras's international division in the 1980s, then became an oil consultant and helped draft legislation in 1997 that removed Petrobras's monopoly on exploration.In an August interview, Prates said Petrobras under Lula would reverse years of cost cuts and spend big on refining and renewables, and also rebuild international operations that were curtailed in recent years. Within 30 years he sees the company investing as much in clean energy as it does in fossil fuels.Lula is also expected to revamp local content rules, or the percentage of goods and services for oil projects that need to be sourced from Brazil in order to boost domestic employment. Any increase in that percentage would be a concern for the oil industry because similar policies have led to cost inflation in the past. "We must go back to being the great Petrobras we used to be," Prates said in August. "It needs to transform itself into a global player in the energy transition."In a statement, Petrobras said that the company had not been formally notified about Prates's appointment and emphasised that Lula's nominee is subject to internal governance procedures and the approval of the board. We live in a world where facts and fiction get blurred In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed.