Petrobras ( NYSE: PBR ) -9.8% in Tuesday's trading after Luiz Inacio Lula da Silva was sworn in as Brazil's president on January 1 and removed the company from a list of state-controlled businesses that had been scheduled for privatization.
One of Lula's first official acts was to remove Petrobras ( PBR ) and Brazil's postal service from the list of state asset sales.
Last week, Lula selected Jean Paul Prates, a senator for the new president's Workers' Party and a former Petrobras ( PBR ) official, as the new head of the oil company with the aim of turning it into a renewable energy powerhouse.
Prates has said Petrobras' ( PBR ) previous management was steering the company "off a cliff" by narrowly focusing on oil and gas and neglecting the energy transition.
Lula's inauguration speech promised increased social spending, including an extension of the fuel tax exemption, and has sparked investor fears that the government's new path will be highly interventionist.
The Lula government is telegraphing a doubling of Petrobras' ( PBR ) capex to invest in renewables and refining capacity while reducing fuel margins and cutting dividends to a minimum, Ricardo Fernandez writes in a bearish analysis published recently on Seeking Alpha .
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Petrobras pulled from privatization list in one of Lula's first official acts