Head of Brazil’s State Oil Company Resigns Amid Period of Unrest

The company controls 90 percent of the oil and gas sector in Brazil, which in the past decade has represented roughly 2 percent of the country’s gross domestic product.

Mr. Parente’s departure caused the company’s stock price to plunge and is certain to chill investor interest in Brazil’s oil sector, compounding broader uncertainty about the country’s political future ahead of the presidential election, which is shaping up to be the most splintered and unpredictable in generations.

In his resignation letter, Mr. Parente said he had concluded, in the aftermath of the strike, that he could no longer “contribute to the development of the options the government has before it.”

Head of Brazil’s State Oil Company Resigns Amid Period of Unrest
Head of Brazil’s State Oil Company Resigns Amid Period of Unrest

Roberto Castello Branco, an economist at Fundação Getúlio Vargas, who served on the board of Petrobras from 2015 to 2016, said Mr. Parente took the helm of the company after demanding to have greater autonomy over keeping oil prices largely insulated from market fluctuations.

“Clearly that freedom ended,” he said. “I think the signals the government has sent through these decisions are negative. They have created a new cloud of uncertainty about the future of Brazil’s oil industry.”

The truckers’ strike and Mr. Parente’s resignation underscored the political weakness of Mr. Temer, who over the past few days has made progressively larger concessions as the strike over oil prices transformed into a broader outcry over corruption and a lack of faith in the political elite.

Mr. Parente’s resignation came two days after Senator Vanessa Grazziotin proposed an inquiry into the company’s fuel price policies. Ms. Grazziotin said international oil companies stood to benefit from the subsidies Mr. Temer authorized in recent days, which will divert funds that had been earmarked for health and education programs.

“We’re living a moment of what I would almost call social convulsion,” Ms. Grazziotin said in an interview. “The government says the only way of reducing the price of fuel is by making the population pick up the tab.”

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