Maria das Gracas Foster has stepped down as CEO of the embattled Brazilian oil company

February 6, 2015 2:46 am
Embattled Brazilian oil company Petrobras says the company’s chief
executive and five other top figures are stepping down amid a
long-running kickback scandal at the firm.
Government-run
Petrobras said in a one-line statement on its website that chief
executive Maria das Gracas Foster and five other executive directors
were out.
None of the top officials is facing charges of
wrongdoing, but prosecutors have said the investigation is still in its
early stages.

 Maria das Gracas Foster has stepped down as CEO of the embattled Brazilian oil company. Photo / Douglas Engle

For months there have been loud calls from business and political circles for a shakeup of Petrobras’ top executives.
Even
before the scandal broke early last year, the company was saddled with
huge debt and was not making good on its potential in developing
’s enormous offshore oil fields that could hold upward of 100
billion barrels.
Petrobras has lost billions in market value as daily reports broke about the extent of the alleged corruption.

Prosecutors say construction and engineering firms paid
hundreds of millions in bribes in return for inflated contracts worth
billions.
Petrobras’ debt has been downgraded by Moody’s and
Fitch in the past week, further choking its ability to borrow on
international markets.
The oil firm is Brazil’s biggest company
and is charged with tapping offshore oil fields and creating wealth that
leaders hope will propel the country to developed-world status. But the
debt-plagued company hasn’t met development goals, and the riches
remain buried deep under the sea.
The company did some survey
work off New Zealand’s East Cape early in 2011 and encountered stiff
opposition from environmentalists. It surrendered permits in late 2012.
“This
scandal at Petrobras is a disaster for Brazil,” said a political
analyst at the Getulio Vargas think tank in Rio, Carlos Pereira. “A
company that was a national symbol is today facing a melancholic
situation.”
Brazilian prosecutors have said the kickback scheme
involved at least US$800 million ($1.08 billion) in bribes and other
illegal funds. They expect that figure to grow as they keep
investigating.
Some of that money was funnelled back to the
ruling Workers’ Party and its allies’ campaign coffers, often as legal
corporate donations.
Federal prosecutors said they had recovered
about US$170 million involved in the scheme, that more than 230
businesses of all sizes were being investigated and that 86 people were
facing charges, including several top executives from Brazil’s main
construction and engineering firms who have been jailed.
Federal
prosecutors are expected to announce charges this month against dozens
of politicians, mostly congressmen, in connection with the case.
Speculation
has been rife that Foster, 61, would be fired, but her friend and ally,
Brazilian President Dilma Rousseff, has sharply defended her record of
more than three decades in the company.
Rousseff had yet to comment yesterday on Foster’s resignation.

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