Petrobras Set for Political Uproar as Board Approves $8.5 Billion Dividend

(Bloomberg) — Petrobras introduced one other blockbuster dividend fee, rewarding shareholders at a second of rising concern that the bonanza could come to a halt following Luiz Inacio Lula da Silva’s return to energy.

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The state-run oil agency’s board authorised dividends of three.3489 reais per share, totaling 43.7 billion reais ($8.5 billion), in line with a regulatory submitting Thursday.

Whereas the quantity represents a slowdown from the colossal $17 billion payout the earlier quarter, it means the full for 2022 already surpasses final 12 months’s document 101.4 billion reais. Politicians from Washington to London have been lashing out at oil firms for funneling windfall income to buyers whereas shoppers undergo from greater power costs.

Petrobras Could Unveil Dividends of Up To $11 Billion: Preview

Brazil’s predominant oil union, generally known as FUP, and an affiliation of oil staff who’re additionally shareholders, Anapetro, pledged to contest the huge dividends in court docket earlier than it was introduced. They argue that the quantity is way larger than the investments made by the state-controlled firm, and that the dividends undermine the corporate’s long-term plans.

Most well-liked shares in Petrobras had been up 0.2% at 3:58 p.m. in Sao Paulo time, trimming features after rising by as a lot as 1.8% earlier.

Petroleo Brasileiro SA, as it’s formally identified, was on the middle of Brazil’s presidential elections this 12 months. Its sturdy income and payouts had been slammed by each Lula and President Jair Bolsonaro in the course of the marketing campaign.

JPMorgan Chase & Co., which downgraded Petrobras shares to impartial from obese following Bolsonaro’s defeat, says the change in energy brings uncertainties, together with what’s going to occur with the prevailing dividend coverage.

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The brand new administration “has brazenly criticized how Petrobras has been run and has additionally mentioned doubtless adjustments on the firm,” analysts together with Rodolfo Angele wrote in a report dated Oct. 30. “The principle ones must be on capital allocation and pricing coverage for fuels offered domestically.”

(Updates with further info on dividends)

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