Petrobras CEO says oil giant is not facing economic or ethical crisis

Petrobras’s CEO Graça Foster said on Tuesday (Apr. 15) that the state-run oil company is not facing an economic or ethical crisis. At the Senate, during a hearing held with the purpose of clarifying the corruption allegations in which the oil giant was implicated, Foster stressed that Petrobras should not be judged by the actions of an individual.

“A company whose savings currently total [$22.6 billion], a company which replenishes its reserves at such a quick pace, does not live in the abyss. As regards the ethical abyss, I cannot agree with it, because Petrobras is not the fruit of [the work of] a great man or a great woman. Petrobras is a company of 85 thousand employees and we shouldn’t be measured according to one person and those with whom he was involved. Therefore no, we’re not living in an ethical abyss,” said Foster, in response to Senator Alvaro Dias, from PSDB, a party in opposition to the current Brazilian government.

Senator Dias further mentioned a number of corruption allegations, which, in his view, have stained the ethical and economic image of Petrobras. “Those present are not the ones who wish to destroy Petrobras, but the ones who wish to save it. Petrobras’s history over the last years is one of illicit nominations, bribery, and embezzlement of public funds,” he stated.

Graça Foster admitted that the arrest of the company’s former director Paulo Roberto Costa, effected by the Federal Police while conducting Operation Car Wash (Portuguese: Operação Lava Jato) caused “great embarrassment.” She went on to say that Petrobras has worked to carry out governance actions in an effort to lower the risk of new corruption cases. Suspicions arose that Costa became involved in a criminal organization which embezzled public funds in six states and the Federal District.

“Paulo’s arrest was a huge embarrassment to the company, but the contracts in which he could have taken part are under investigation, and this is the work we can do. It’s a process of governance,” the CEO explained.

Regarding Nestor Cerveró, she announced that he was downgraded after an error was detected in a report presented by him in 2006, which provided the basis for the purchase of Pasadena refinery in Texas. “Our colleague Cerveró went from the board of directors of a subsidiary to a much humbler one – that of BR Distribuidora. It’s way more limited.”

Graça Foster also acknowledged that Petrobras’s purchase of the oil refinery in Pasadena was a good project at first, but said it lost its profitability later on. “Having another look at those data today, it was not good business, it cannot be good business. And this is not disputed, from an accounting standpoint.” In her view, losses incurred by Petrobras due to the purchase of the refinery amount to $530 million.

Translated by Fabrício Ferreira