(Bloomberg) -- The Brazilian government's pick to run Petroleo Brasileiro SA withdrew from the role, risking a power vacuum at Latin America's biggest oil producer that has become the center of a political dispute over fuel prices.
Adriano Pires declined the invite Monday, Energy Minister said in a statement, adding that the decision was taken by personal reasons.
The industry veteran was appointed by the Brazilian government, the company's majority shareholder, to replace Joaquim Silva e Luna, who had been sparring with President Jair Bolsonaro over fuel prices. On Sunday, Bolsonaro's pick to be the chairman of the board at the state-run giant, Rodolfo Landim, also withdrew his name.
Petrobras's Nominee for Chairman Withdraws From Role
The U-turn comes just days before the company's shareholders' meeting to elect the new board, scheduled for April 13. Petrobras bylaws state that the CEO has to be a board member. Shares closed 0.9% lower Monday at 32.70 reais ($7.12) in Sao Paulo.
“It seems that they are running out of more technical names, and an internal candidate may be an option,” said Marcelo de Assis, an analyst at consultant Wood Mackenzie.
Pires's decision came amid speculation over potential conflicts of interest related to years of work as a consultant for private oil and gas companies, some of them who have businesses that compete with the state-owned company. Landim, meanwhile, is being probed by prosecutors for alleged fraudulent management of an investment fund that caused losses to Petrobras pension fund Petros.
Latin America's biggest oil producer will have its third CEO since early 2021. Silva e Luna was pushed out following growing political pressure to contain fuel prices, the same reason that his predecessor Roberto Castello Branco was dismissed a year ago.
Bolsonaro's Third Petrobras CEO Pires Eases Subsidy Fears
The leadership turmoil underscores how difficult it is for developing countries -- where transportation expenses take up a larger chunk of family budgets -- to pass on costs to consumers when prices spike. Whoever assumes Petrobras's command will be put to the test in an election year where politicians of all stripes are looking for someone to blame for pain at the pump.
The maximum compensation for an executive officer on Petrobras's board was about $562,253 in 2021, according to its annual report.
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