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Petrobras stock plunges after Brazil government pushes for replacement of CEO

Tomi Kilgore
·1 min read
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The U.S.-listed shares of Petroleo Brasileiro S.A. , known as Petrobras, plunged 20.4% in premarket trading Monday, after Brazil-based state-controlled oil and gas company disclosed that the government requested its chief executive be replaced. In a filing with the Securities and Exchange Commission, Petrobras said it received a letter from the Ministry of Mines and Energy, requesting the company replace CEO Roberto da Cunha Castello Branco with Joaquim Silva e Luna, an army general, amid complaints from Brazil President Jair Bolsonaro about price hikes for oil and gas. J.P. Morgan analyst Rodolfo Angele said the company's "fuel pricing dilemma" is not new, but represents an "intrinsic tension" and is a risk to the status quo at the company. The price hikes come as crude oil futures have run up 43.3% over the past three months while natural gas futures have rallied 6.6%. Over the same time, Petrobras shares have sank 11.8%, while the iShares MSCI Brazil ETF has gained 3.4% and the S&P 500 has advanced 9.3%.