On Friday, the Petrobras Board of Directors proposed releasing 50% of their extraordinary dividends, which amounted to R$43.9 billion ($8.74 billion).
This decision is up for review at the Extraordinary General Meeting scheduled for April 25, alongside the Ordinary General Meeting.
President Luiz Inácio Lula da Silva approved the proposal amid rising tensions between Petrobras’ management and the Ministry of Mines and Energy.
The board believes that releasing half the dividends is the optimal strategy for the company.
However, the fate of the remaining dividends depends on future international market conditions.
The board encountered opposition from ministry officials and employee representatives, who argued for retaining all dividends to promote fiscal conservatism.
In contrast, minority shareholders pushed for a complete payout.
This conflict escalated tensions within the board, culminating in a crisis between Petrobras CEO Prates and Energy Minister Alexandre Silveira.
Finance Minister Fernando Haddad intervened to mediate the dispute.
If the EGM approves this partial payout, it would contribute over R$6 billion ($1.2 billion) to the national treasury.
This funding is critical as it helps address financial shortfalls caused by recent payroll tax cuts for small municipalities, a challenge imposed by Senate President Rodrigo Pacheco.
In March, the board initially chose to retain the dividends, revealing deep divisions within the government.
Prates supported the 50% payout, leading to a heated disagreement with Silveira and Chief of Staff Rui Costa, who supported total retention.
This nearly led to Prates’ dismissal, though the issue has since stabilized. Still, a final decision from President Lula is pending.
Petrobras confirmed the board’s decision, noting it aligns with the evolving economic landscape, such as Brent crude prices and exchange rate fluctuations.