Petrobras CEO to Join Sao Paulo Government

Petrobras’s chief executive will leave the Brazilian state-controlled oil and gas producer after only a short tenure, ahead of a possible shift in corporate strategy under president-elect Luiz Inacio Lula da Silva, said the Financial Times.

Petroleo Brasileiro, as the Rio de Janeiro-headquartered group is formally known, on Tuesday said Caio Mario Paes de Andrade would join the incoming administration of the newly elected governor of Sao Paulo state.

The 48-year-old will continue in his current role in the coming weeks, giving “exclusive attention to the change of command that will take place in the company”, Petrobras said in a statement. A departure date is not yet set.

His exit is the latest change at the top of Latin America’s largest hydrocarbon supplier, which is an important pillar of Brazil’s economy and has a stock market valuation of USD69bn.

Petrobras has had four chief executives in less than two years, after outgoing president Jair Bolsonaro removed its three previous leaders following complaints over fuel price rises. Paes de Andrade, who assumed the helm in June, was formerly an official in the Bolsonaro administration’s economy ministry.

The move clears the way for a new candidate to be selected by Lula, a veteran leftwinger who will be returning to the presidency for the third time on January 1 after more than a decade out of office. As the controlling shareholder in Petrobras, with a 37 per cent equity stake and a majority of voting rights, the Brazilian state can effectively appoint its boss.

Lula has stated his desire for Petrobras to expand its refining capacity and play a greater role in the low-carbon energy transition, with investments in areas such as renewable power and biofuels. The 77-year-old former metalworker has also criticised its policy of moving domestic prices for petrol and diesel in line with international rates.

Many investors, however, are wary of a return to the interventionist approach pursued under past leftwing governments led by Lula’s Workers’ party, or PT. Petrobras was at the centre of a massive corruption scandal during PT rule called Lava Jato, or Car Wash, which ensnared dozens of businessmen and politicians.

It also became heavily indebted under Lula’s chosen successor as president, Dilma Rousseff, as it was pressured to subsidise fuel prices. The group has since reformed its corporate governance, divested non-core assets, such as refineries and petrol stations, and focused on deep-sea oil drilling at its rich offshore reserves.

However, it has come under political fire over bumper profits and dividend payouts. Sao Paulo-listed preferred shares in Petrobras are down by more than one-fifth since Lula’s narrow election victory over Bolsonaro at the end of October, underperforming the local stock index.

We remind, Petrobras disclosed a 15% increase in its five-year spending plan to USD78 billion, with little change to the company's strategy of focusing on fossil fuel production. Throughout 2022, Petrobras delivered an operational and financial performance in line with its commitment to generate value for society and shareholders and in full adherence with the 2022-2026 Strategic Plan, showing the Company's resilience and solidity, and thus increasing the degree of confidence in achieving its goals.

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Swedish polymer group Hexpol has completed the previously announced acquisiton of US thermoplastic compounding company McCann Plastics for USD120m on a cash and debt free basis, said the company.

“The acquisition of McCann is fully in line with our growth strategy with acquisitions within polymer compounds and strengthens our market position in the US,” HEXPOL’s CEO, Georg Brunstam, said in a statement.

McCann Plastics, of North Canton, Ohio, specialises in niche thermoplastic compounds, with a focus on roto moulding applications. Its main end customer segments are general industry, agriculture and specialised cooling boxes.

The company, with sales of USD72m in the past 12 months, has operations at two sites in Ohio and employs about 100 people.

As per MRC, Hexpol has completed the previously announced acquisition of 100% of Union de Industrias C.A., S.A. (Unica) from Espiga Capital, a Spanish based Private Equity firm. Unica is a significant player in Rubber Compounds in Spain, supplying several demanding customers in the automotive, construction and agriculture sectors.
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Swedish textile recycler Renewcell has signed a deal to provide Austrian fibre manufacturer Lenzing with up to 100,000 tonnes of its Circulose pulp over the next five years, said the company.

Lenzing is to use 80,000 to 100,000 tonnes of Circulose - made from pre- and post-consumer textile waste - for use in the production of cellulosic fibres for fashion and other textile applications.

Renewcell CEO Patrik Lundstrom commented: “Lenzing is a major player in our industry, with an inspiring track record of path-breaking technical excellence and sustainability leadership.

We remind, Lenzing Group, a leading global producer of wood-based specialty fibers, is celebrating a key milestone as the production of LENZING™ ECOVERO™ branded viscose fibers reaches over 300,000 tons since the brand’s inception in 2017.

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A gas chemical enterprise to produce methanol is expected to be built in the West Kazakhstan region as part of a USD140-million project, said Interfax, citing the press service for the Kazakh Industry and Infrastructure Development Ministry.

Kazakh Industry and Infrastructure Development Minister Kairbek Uskenbayev met with representatives of CITIC Construction Co. Ltd. and China Huanqiu Contracting & Engineering (Shanghai) Co., Ltd, the press service said.

"The Kazakh company Zhaik Petroleum LTD signed an EPC contract with the Chinese side during the meeting. This contract envisages the construction of a methanol-making gas chemical enterprise with a production capacity of 130,000 tonnes in the West Kazakhstan region," it said.

Some 500 jobs will be created during construction and assembly work, and 220 permanent jobs will be created after the facility is put into operation. The overall cost of the project stands at USD140 million.

The new gas chemical enterprise is expected to begin operating in late 2024. It will be followed by the project's second stage, estimated at USD200 million, to launch the production of ammonia and carbamide.

Earlier it was reported that on November 8, KazMunayGas launched a new plant for the production of polypropylene with a capacity of 500 thousand tons per year in Atyrau, Western Kazakhstan. The new plant is valued at USD2.6 billion and will be able to produce up to 65 types of polypropylene to meet domestic demand, as well as export polypropylene to foreign markets. It uses Catofin and Novolen technologies provided by Lummus Technology.
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Nouryon has acquired a specialty surfactant alkoxylation plant on Singapore’s Jurong Island petrochemicals hub, the Netherlands-based chemical company said in a statement.

The acquired plant will enhance Nouryon’s ability to serve growing regional customer demand in end-markets such as agriculture and food, home and personal Care, natural resources, and paints and coatings, it said.

Details about capacities, the acquisition price or the seller’s identity were not disclosed.

We remind, Nobian has successfully started to supply chlorine and caustic soda from 100% renewable electricity in the Netherlands and Germany. This achievement underlines Nobian’s commitment to accelerating the supply of green products in its portfolio. The certification of Nobian’s caustic soda and chlorine by the International Sustainability and Carbon Certification (ISCC) contributes to Nobian’s renewable energy goals, as part of its sustainability program Grow Greener Together.

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