U.S. Markets closed

Petrobras denies political interference, eyes divestments amid investor unease

(Adds information from CEO press conference in Rio)

By Marta Nogueira, Rodrigo Viga Gaier and Luciano Costa

RIO DE JANEIRO/SAO PAULO, April 17 (Reuters) - Brazilian state-run oil firm Petroleo Brasileiro SA is completely free of political interference and is examining divesting a wide range of assets, including its fuel distribution unit, executives said on Wednesday.

In an impromptu press conference at the Rio de Janeiro headquarters of Petrobras, as the firm is known, Chief Executive Roberto Castello Branco announced a diesel price hike of 10 cents per liter and said the company has complete control over its pricing strategy.

Speaking at an event in Sao Paulo only minutes before, Chief Financial Officer Rafael Grisolia said the firm was looking at selling off assets such as deepwater pipelines and Petrobras Distribuidora SA, which includes a gas station chain stretching across the country.

The comments come as executives scramble to contain the fallout of a Friday incident, in which the firm canceled a diesel price hike at the behest of Brazilian President Jair Bolsonaro, stirring fears of political interference and tanking Petrobras shares.

While Bolsonaro´s government has promised a hands-off approach to Petrobras, investors are wary of a return to policies enacted under past administrations, in which the company was forced to sell fuel at a discount to international rates.

On Tuesday, Bolsonaro´s spokesman and Economy Minister Paulo Guedes sought to characterize the canceled price hike as a one-time error that would not be repeated.


Petrobras is analyzing the best model for selling three offshore natural gas pipelines, CFO Grisolia said, including whether they will be sold individually or in a package.

Grisolia also said the oil company would "probably" reduce its stake in Petrobras Distribuidora to below 50 percent from the current 71 percent, effectively privatizing the unit through a secondary share offering.

Investors have cheered the firm's recent push to cut debt and refocus on oil exploration and production via an aggressive divestment program.

Reuters reported earlier this month that Petrobras was preparing to sell three more gas pipelines after successfully selling its larger TAG unit to France's Engie for $8.6 billion.

Reuters reported on Tuesday the company had hired nine banks to manage Petrobras Distribuidora's share offering. (Reporting by Marta Nogueira and Rodrigo Viga Gaier in Rio de Janeiro and Luciano Costa in Sao Paulo; Writing by Gram Slattery and Tatiana Bautzer; Editing by Peter Cooney and Cynthia Osterman)