Top Leadership Change at Petrobras… Gabrielli Expected to Depart for Political Bid

RIO DE JANEIRO (Dow Jones)–Speculation is growing that a leadership change could be under way at Brazilian federal oil company Petroleo Brasileiro (PBR, PETR4.BR), with Jose Sergio Gabrielli exiting the state-run energy giant to make a long-anticipated shift into politics.

Gabrielli, who has been chief executive at Petrobras since 2005, will leave the company to take a post in his home state of Bahia, in northeast Brazil, according to newspaper reports on Monday. That would be a precursor to a run for governor of Bahia, the country’s sixth-largest state in terms of gross domestic product, in 2013, the newspapers said.

The current governor of Bahia, Jaques Wagner, is in his second term as governor of Bahia and term limits prevent him from running for a third term. A spokesman for the governor didn’t respond to a message left on Monday morning.

The talk about Gabrielli’s possible political ambitions have been widely discussed since before President Dilma Rousseff was elected in late 2010. The chief executive has close ties to Rousseff’s ruling Workers’ Party, known as the PT.

Petrobras’s press office didn’t immediately respond to questions about the report. In an interview with Reuters news agency on Sunday evening, Gabrielli declined to confirm his departure, saying that he was traveling to the World Economic Forum in Davos, Switzerland, on Monday as the chief executive of Petrobras.

In the past, Gabrielli has deflected questions about a possible run for political office. But government leaders acknowledged last week that Gabrielli could be primed to switch careers.

“[Gabrielli] might want to leave to be a candidate for the government of Bahia, so he might want to leave Petrobras to set up his candidacy,” said Sen. Humberto Costa, who is the leader of the government’s block of allies in the upper chamber of Congress, in a telephone interview Friday.

Petrobras’s director of gas and energy, Maria das Gracas Foster, has been tipped as the frontrunner to take over from Gabrielli. Foster, who is a long-time friend of President Rousseff, is a well-respected technocrat who is expected to further align the company’s plans with the government’s strategy for developing offshore oil reserves.

“That’s a name that I’ve heard mentioned,” Sen. Costa said about Foster’s potential candidacy.

However, several other political heavyweights with ties to the government have been linked to the chief executive post at Petrobras in recent years, including Finance Minister Guido Mantega–who currently serves as the chairman of Petrobras’s board of directors–and Brazilian National Development Bank President Luciano Coutinho.

Petrobras downstream director Paulo Roberto Costa, who in the past has served as Petrobras’s acting chief executive when Gabrielli’s away, has also been considered a potential candidate.

–By Jeff Fick, Dow Jones Newswires

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