The new chief executive officer of Brazil's Petrobras said on Tuesday that he has full autonomy to dictate its own fuel-pricing policy and protect cash, even as he questioned the size of losses stemming from a giant corruption scandal.
In his first public statements since he was named CEO on Friday, Aldemir Bendine said no decision had been taken on whether Petroleo Brasileiro SA, as the company is formally known, will book 88.6 billion reais ($31 billion) of potential asset writedowns outlined in notes to its unaudited third-quarter results in January.
By saying that "this does not reflect the reality of the company," he suggested the assessment was too high, a comment unlikely to calm investors concerned that the government appointed him to limit the political fallout from a writedown rather than clean out dead-wood in the company's accounts.
"What we are discussing now is the methodology, the way to calculate this," Bendine said on Globo Television network's nightly news program.
"The results will reflect the actual situation in 2014, which could be affected by corruption, but also other variables such as prices," he said.
Bendine said a writedown is to be expected in fourth-quarter audited results which Petrobras must provide the market by the end of June or face default on more than $50 billion of bonds.
The 88.6 billion real number was released by former CEO Maria das Graças Foster in her notes to the third-quarter result. She said that an internal review of assets related to evidence in a price-fixing, bribery and political kick-back probe found 88.6 billion reais of over-valued assets and 27.2 billion reais of undervalued assets.
If confirmed by auditors, that would lead to a 61.4 billion real writedown, an amount equal to more than half the company's current 120-billion-real ($43.3 billion) market value.
President Dilma Rousseff picked Bendine, a 35-year veteran of state-controlled Banco do Brasil SA, to revive Brazil's largest company from the fallout of a graft scheme involving former executives, top construction and engineering firms and political parties, including Rousseff's Workers' Party.
Investors hoped for a more independent manager with fewer ties to the Rousseff administration.
"To question writedowns made by a group of respected people hired by Petrobras itself is not a good sign," said Reginaldo Gonçalves, an accounting professor at Faculdade Santa Marcelina, a Sao Paulo university.
"You can't leave over-valued assets on your books for any reason or use them as collateral for debt," he added. "The government is showing it will do anything to avoid the damage a writedown will do to its reputation."
Bendine said independent auditors Pricewaterhouse Coopers were accompanying Petrobras "day by day" in the task of preparing the release of its results.
Bendine said the company's priority was sound management of its cash flow and indebtedness. Petrobras is the world's most indebted oil company. Bendine said the debt was not as high as it looks, given the oil company's ability to generate revenue.
