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Kenneth Rapoza: How new Petrobras CEO
stacks up against his global peers

 

 

The Brazilian government has outdone itself on this one. Their new hire to helm the hobbled oil giant Petrobras is a banker with no oil and gas industry experience whatsoever.

Brazilian president Dilma Rousseff and her chief of staff Alozio Mercadante picked long time government lender and friend to the Workers' Party, Aldemir Bendine, to run the country's flagship enterprise.

Once the proud symbol of a new, high tech, oil rich Brazil, Petrobras has fallen on hard times. Last year, the federal police arrested dozens of people involved in the worst corporate corruption scandal in Brazil's history. Petrobras is Brazil's Enron. There are at least three class action lawsuits filed against the company in New York. The CEO, Maria Graças Foster, a friend of Dilma, asked to resign this week. Five other senior executives followed in her wake.

Her demise was a short-lived boon for Petrobras stock. It rose over 7% on Tuesday. But when Petrobras investors woke up Friday morning to discover Bendine, the 52 year old CEO of government run Banco do Brasil Banco do Brasil , was replacing Foster, they quickly dumped the stock again.

Petrobras shares fell over 9% in the early afternoon trading hours. The reason? Dilma didn't “go to the market” like she said to find a competent industry executive to run Brazil's most important company. She went to a guy who studied business  in college, got hired at Banco do Brasil as an intern, and has been there ever since. In other words, he knows nothing about oil and gas.

Maria Graças Foster was a chemical engineer who spent her career at Petrobras, having been hired right out of college.

This puts Brazil and Bendine in a unique position. In fact, it is unrivaled. Petrobras, once considered a serious oil and gas player in the world, is now the only major oil company run by someone who doesn't know a drip about the industry. Let's face it, even Russia and Venezuela state controlled oil firms have guys running the business with a history in oil markets. At the top, Petrobras now looks more like Rosneft Rosneft than YPF and PDVSA.


Not the best pick for the job. A career-man at state run Banco do Brasil was picked to be the CEO of struggling Petrobras. Now, Aldemir Bendini, is the only oil exec with no industry experience whatsoever.


Bendine's Oil Industry Peers

Bendine has an MBA from the the Catholic University of São Paulo. He has held different mid-level to upper level management roles at the bank, including vice president of the bank's credit card division and retail banking division. He might be a great banker, but can he run a $42 billion oil company that's in the middle of a massive corruption scandal? The market doesn't think so. Here is how Bendine compares with executives of other integrated oil and gas companies.

Eulogio del Pino, President, Petroleos de Venezuela: Took over PDVSA in late 2014. Geophysicist with a masters of science degree in oil exploration from Stanford University. Has 36 years in the oil and gas industry.

Igor Sechin, President of Rosneft: Sechin is a lifelong politician.  Like Bendine, he has no educational background in this business. He started his political career as an interpreter for the Russian government. But the man known locally as “Darth Vader” has been in the oil and gas industry for 11 years now. Despite his lack of formal training, he has become an oil man by default. Sechin rose to power through the controversial state acquisition of privately held Yukos Oil in 2004, then owned by billionaire Mikhail Khodorkovsky. Since then, Sechin has been involved in landmark oil deals, including one with BP…which later fell apart.

Bob Dudley, CEO of BP : Chemical engineer and business management background. Mostly a deal-maker in the oil business who is best known for his run-ins with Lord Vader himself. BP tied up with a Russian entity known by its acronym TNK. That thing fell apart, but Dudley was never blamed for it. He was later tasked with saving BP's image after the disastrous Gulf of Mexico Deep Water Horizon oil spill in 2010. Dudley has 36 years in the industry.

Rex Tillerson, CEO of ExxonMobil : Engineering background. Been at Exxon for life, starting out in 1975 and working for XOM globally for the next 40 years.

John Watson, CEO of Chevron: His educational background is in agricultural economics, but his MBA comes from the famed University of Chicago School of Business.  This “Chicago Boy”, as University biz school grads are known, has been with Chevron now for 35 years. He has been CEO since 2010.

Miguel Galuccio, CEO of YPF:  Oil engineer. Been in charge of Argentina's state owned oil company since 2012. The 46 year old has been in the oil industry for 19 years.

Zhou Jiping, President of Petrochina: Petrochemical engineer with 40 years in China's oil and gas industry.

Ben van Beurden, CEO of Royal Dutch Shell: Chemical engineer who has held numerous roles within Shell, especially on the operational and commercial side of Shell's liquefied natural gas business. He has been with Shell for 32 years.

Tan Sri Dato' Shamsul Azhar bin Abbas, President of Petronas: Masters of Science in Energy Management from the University of Pennsylvania. Has held various management roles within Malaysia's flagship oil firm and has been in the industry now for 40 years.

Khalid Al-Falih, CEO of Saudi Aramco:  Engineering degree from Texas A&M and MBA in petroleum business management.  Thirty-six years in the Saudi oil business.

Patrick Pouyanne, CEO of Total SA:  Pouyanne has been with Total since the 1990s. He's held chief executive roles in Qatar and Angola. A chemical engineer by training, Pouyanne moved up to the presidency of Total's refining and chemicals division in 2012 before being named CEO in 2014 following the death of CEO Christophe de Margerie.

Balasubramanian Ashok, CEO of Indian National Oil Company: He has 34 years under his belt in this business, taking over the CEO spot in 2014. B. Ashok has a mechanical engineering degree from India and has been involved in various managerial positions at the state owned energy firm.

There you have it. There are many other oil companies in the world. Some of them might have senior executives with no formal training or history in the industry. But this random walk shows that even the top guys in Venezuelan and Argentinian oil firms have backgrounds in the businesses they have been asked to manage.

Bendine will be tasked with more than saving Petrobras' finances. He will have to manage a deteriorating public image, probably his most important task of all.

Paul Mason is a is a Forbes contributor, covering business and investing in emerging markets, has cover Brazil for Down Jones, Wall Street Journal and Barron's. Petroleumworld does not necessarily share these views.

Editor's Note: This commentary was originally published by Fortune , 02/07/2015. Petroleumworld reprint this article in the interest of our readers.

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