Petrobras announces new management model

Petrobras announced today (Jan. 28) that will cut job positions and adopt a new model of management and governance, in a note to the Securities and Exchange Commission of Brazil (CVM).

Petrobras CEO Aldemir Bendine said the new model is part of "a well-structured plan." In the overhaul's first stage, they have decided to cut 14 job positions of senior management and directorate, which will be reduced from seven to six, because the areas of Supply and Gas and Energy will be merged. Management positions directly related to the Board of Directors, like the president and directors, will be reduced from 54 to 41. Other management positions will be evaluated during the second stage, scheduled for February. According to the firm, staff's appointments and allocation will begin to happen in March.

The new Board of Production Development & Technology (DP&T) will focus on carrying out investment projects. "This new structure will concentrate management and technical skills to carry out projects," explained Petrobras.

With the changes, areas have been merged and activities centralized. In the overhaul, they will also establish new criteria to appoint executive managers and for managers to bear responsability for results and decisions.

Petrobras expects to save $445 million a year with the changes and forecasts a reduction of at least 30% in the number of management positions in non-operational areas. According to the company, there are about 7,500 approved management positions, of which 5,300 are in non-operational areas.

The company also announced that it will create six technical statutory committees, formed by executive managers. After preliminary analysis, they will be responsible for submitting recommendations on issues to be decided by the directors, who will share responsibility in decision making.

From now on, the executive managers' appointment will undergo new analytical criteria of technical training and management. The appointments and cuts of these positions will have to be approved by the Board of Directors.

"By strengthening the commitment to compliance, our overhaul forecasts changes in internal control over hiring and investment. Procurement activities for goods and services will be only managed by the new Human Resources Department, SMS [policies on security, environment, and health] and Services," listed Petrobras.

The firm also reported that the changes resulting from amendments to Petrobras Bylaws will be submitted to the General Shareholders' Meeting to be convened in due course.

Translated by Amarílis Anchieta