Silveira recognizes conflict with Petrobras president – 04/03/2024 – Market

The Minister of Mines and Energy, Alexandre Silveira, recognizes that there is a conflict between his role and that of the president of Petrobras, Jean Paul Prates, but says he sees the differences as healthy and not personal.

“I have always had heated, real debates. But transparent debates about what I, as a government, defend at Petrobras; and the president of Petrobras, naturally, [defende] as president of a company. The roles are different. That’s why there is a conflict”, he tells Sheet.

One of the recent differences was in the allocation of dividends to shareholders. Prates advocated distributing 50% of extraordinary resources, but Silveira and the council disagreed in the face of discussions about the state-owned company’s capacity for investment — including in clean energy.

The final decision to retain resources in the company caused a reaction from investors on the stock exchange and took billions off the company’s market value. For the minister, who compares the episode to a ripple or the noise caused by tapioca biscuits, there is no rush to discuss the topic again.

The minister says that the Petrobras board must always be respected, but avoids commenting on whether Prates is managing well — leaving the assessment to President Luiz Inácio Lula da Silva (PT). Behind the scenes in the government, a possible replacement of the president of Petrobras has been discussed for months.

Silveira says that Petrobras will be the most valued company on the Stock Exchange during Lula’s third term and that he does not insist on nominating names for the state-owned company, but that he does not give up his authority in the discussions. “The day you give up your authority for a second, you never get it back. So, the authority that is delegated to me — and authority is not arrogance — I will not compromise on executing.”

What was Mr. in the discussion of Petrobras dividends?
There was no specific discussion about Petrobras’ dividends, which was very transparent. There was a natural discussion about the best allocation of extraordinary dividends. Always remembering that we defined and publicized that Petrobras would distribute, as it did, 45% of ordinary dividends. 20% more than what is determined by the State-Owned Companies Law.

The extraordinary things, when asked by the board, he understood and convinced us that the most prudent thing at that moment was to first have access to Petrobras’ approved investment plan, so that he would have insurance to distribute the remaining dividends. That’s why he allocated those dividends to an account that can be exclusively used to distribute dividends at the appropriate time.

It was a noise. It was you sitting on top of a packet of cassava crackers. You made noise and then ate the bran, which is really delicious, even better than eating the biscuit.

At the time of the decision, was it already known that the reserved resources would remain in this account? And if so, why would this affect the investments?
I knew it, completely. It’s not that it would affect the investment plan. The approved Petrobras investment plan does not depend on this resource to be executed, but depends on the company’s debt level, level of loan contracting, level of power to contract national and international loans. If the president of the company, at that moment, had voted with the board, there would have been no fuss.

Was he upset in this discussion?
I don’t know. The question has to be asked of him.

Mr. Didn’t you talk to him?
He voted. He decided to vote against his peers on the board. He [na verdade] abstained.

And how is the relationship between Mr. it’s him?
Guys, very good.

And professional?
Historically, there is a healthy debate between the Minister of Mines and Energy and the president of Petrobras, which is linked to the ministry. Minister Dilma [Rousseff] had conflicts with the president [Sergio] Gabrielli. There were always conflicts. There was none in the Bolsonaro government, because Paulo Guedes wouldn’t let minister Bento [Albuquerque] have access to the president of Petrobras [Caio Mário Paes de Andrade, na reta final do governo].

President Lula is someone so worthy, so competent, so experienced, so sensitive, that he never held a meeting with the president of Petrobras in my absence. This is called respect for the adequate and transparent management of public companies linked to each ministry.

I have always had heated debates, true, but transparent debates about what I, as a government, defend at Petrobras, and what the president of Petrobras [defende] as president of a company. The roles are different, so there is a conflict.

Why do I call it healthy? Because it is often not healthy, it is not correct, it is not lucid, to want to personalize the dispute. I did not appoint a director of Petrobras. I had the opportunity to recommend it, I confess. I don’t care to indicate. I have no personal names to indicate. There is no dispute from me regarding political space at Petrobras, nor from my party. It does not have. My party never wanted space in Petrobras.

If you ask me a question: is it possible for the president of a company, like Petrobras, to converge the interest of the shareholder with that of the controller? Fully possible. It requires humility, discretion and competence.

Does Prates have these qualities?
I’m not going to label anyone, least of all the president of Petrobras. But I’m saying it’s possible, as long as you value, work and have these qualities.

What are the differences between you?
Today, at this moment, none. Today, at this moment, I think I can have a little peace of mind and he can have it too. Tomorrow morning it could be… I hope his mood dawns well.

How often do you talk?
Very, very often. It’s difficult for a week to go by without something like this being routine. Now, more strategic issues, all, absolutely all, are discussed with more participation from the Council. We talk to Petrobras’ management more through the Board than through the board itself. I understand that the board has a great responsibility, everyone has to recognize that it is a great challenge. It’s not for anyone.

The Petrobras board of directors must always be a figure that is highly revered and respected by all of us. I do this with the president of Petrobras, who was my fellow senator. But I learned something else from [ex-vice-presidente da República] José Alencar. The day you give up your authority for a second, you never get it back. So, the authority that is delegated to me — and authority is not arrogance — I will not compromise in executing.

And Mr. Do you think Prates is doing a good job?
I leave the evaluation of the management of the president of Petrobras to the president of the Republic.

Mr. Do you advocate that extraordinary dividends be paid?
At the moment that Petrobras governance, through its advisors, deems it opportune.

Has new investment data been represented?
No, and I don’t think there’s any rush.

Not in a hurry?
Why would you be in a hurry? It’s there, it’s guaranteed, it belongs to the shareholders. It’s paying off. If one day someone goes there and takes a penny to be able to invest it in something other than profit, then I think any noise will be fair. The rest was, once again, unnecessary fluff. Petrobras will be the company that will gain the most value in President Lula’s third term.

O mr. He said that Petrobras cannot have exorbitant profits as its only objective. What would be the definition of that?
A profit that does not fulfill the missions that are in the Constitution and in the State Law. That it is a company that invests in its longevity, in its perpetuity, that is, that it does not waste its assets, as was done under the previous government, selling assets, distributing them with dividends. Do you know what caused the noise? Minority, reference shareholders were not used to it. They were receiving distribution of dividends that were not profits, which were sales of assets as profits. It was delicious, they were even licking their lips. The company has to distribute operating profit, it has to be competent.

We understand that Petrobras has to be a long-lasting company. First, in oil and gas exploration. In the second, refining. And, thirdly, it will be a company strongly and highly specialized in energy transition. Because no company in the world has more platform expertise than Petrobras. And, in the medium term, offshore wind will be the major generator of green hydrogen and, consequently, will be able to export this green hydrogen to decarbonize the planet. Brazil will be the main protagonist of this.

X-RAY

Alexandre Silveira, 53
Minister of Mines and Energy. He is a retired delegate from the Civil Police of Minas Gerais. He was general director of Dnit (between 2004 and 2005), federal deputy, secretary of the government of Minas Gerais and senator.