Vale SA (ADR) (NYSE:VALE) CEO Heading To Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR)?

Speculations have emerged that Vale SA (ADR) (NYSE:VALE)’s CEO, Murilo Ferreira, could picked to lead the board of embattled oil giant Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR). This is not the first time Ferreira is being associated with a post at the state-run oil company. After President Dilma Rousseff won a second term, reports emerged that Ferreira could be appointed to take reigns at Petrobras as CEO, but that never happened.

Have analyst identified a ongoing trend in VALE?

People with insider knowledge are citing that Ferreira is being considered for the post of chairman of the board of Petrobras. If the speculations are true, Ferreira will take over from Guido Mantega, a former finance minister. Petrobras’ next board meeting is slated for March 23 during which a new leader is expected to be unveiled.

Market-friendly face

Executive reshuffle at Petrobras following the re-election of Rousseff saw state banker, Aldemir Bendine, being appointed as CEO of the state-controlled oil company. Bendine replaced Maria das Gracas Foster. According to pundits, the administration of Rousseff is likely to favor a candidate that is more market-friendly to lead the board of Petrobras, in which case Vale SA (ADR) (NYSE:VALE)’s Ferreira fits the bill.

How independent is Ferreira?

However, the influence of the government in the affairs of Petrobras has led to the question about the independence of Ferreira. People who have worked with Ferreira believe that he is his own man in spite the fact that he gets along well with the government, which is the controlling shareholder in Petrobras.

Government officials have been accused of looting Petrobras. The company has embarked on divesting some of its assets at home and abroad to raise funds to pay down its huge debt. Additionally, Petrobras’s CEO, Bendine, hinted that he would slow down capital spending to preserve cash.

Running Vale

At Vale SA (ADR) (NYSE:VALE), Ferreira recently oversaw the signing of a fresh deal with Silver Wheaton for a stake in its Salobo gold mine. Vale will cede another 25% in the assets to Silver Wheaton in exchange of $900 million in cash consideration.

In the previous deal, Vale SA (ADR) (NYSE:VALE) transferred 25% ownership in the mine to Silver Wheaton, which means that the latest transaction gives Silver Wheaton 50% interest in the mine.

About the Author

Adam is a staff reporter for US Markets Daily Publications & Media, covering foreign affairs and domestic policy.

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