Petroleo Brasileiro S.A.– Petrobras  shares are trading lower after it disclosed that CEO Jean Paul Prattes is resigning from the position.

Paul will also step down from the position as a member of the Petrobras Board of Directors.

The company will replace Paul with a former regulator who shares Brazil President Luiz Inacio Lula da Silva’s views, reported Reuters.

As per the report, Brazil President Luiz Inacio Lula da Silva fired Petrobras CEO following a dispute over dividend payments.

Prates served less than a year and a half as Petrobras’ CEO and is the fourth Petrobras CEO to be dismissed in about as many years for political reasons. 

Industry analysts expressed concern as CEO Jean Paul Prates was seen as balancing the market demands for disciplined capital spending and healthy dividends with political demands to stabilize fuel prices and invest in job-creating sectors, as per the report.

Frederico Nobre, chief equities analyst at Warren Investimentos, commented “It was unnecessary, because Jean Paul Prates was doing a very reasonable job,” per the report.

Yesterday, Petrobras reported first-quarter FY24 sales of $23.77 billion (-11.2% Y/Y), missing the consensus of $24.35 billion.

Price Action: PBR shares are down 7.16% at $15.50 at the last check Wednesday.