Opinion: Bovinity and Puppetry, Petrobras in Brazil, a Smidgen

Opinion, by Michael Royster

RIO DE JANEIRO, BRAZIL – Bovinity has been defined as: “the state or quality of being like a cow or ox, especially in the sense of being dull, stolid, and slow-witted.” The Curmudgeon submits that, in a word, Dilma’s been positively bovine about Petrobras.

She is over-impressed by its symbolic and historic importance, so she seems to think that the Sacred Cow can simply stand there, dull, stolid and slow-witted, chewing its cud, and all will be well. She tried to get the current Petrobras executive officers to join her in this fantasy, and remain as lame ducks until the end of March, giving her more time to choose successors. She failed.

Dilma has now nominated Aldemir Bendine, surprising almost everyone. He’s a banker, since 2009 President of Banco do Brasil, aka The Sacred Heifer. In that position, he has kowtowed to Dilma’s wishes uniformly, even when he knew it might be bad for the bank, such as unilaterally lowering interest rates to below market levels.

Dilma had said she’s going to let the new President choose the other Directors, even though, officially, it’s the Petrobras Supervisory Board who should do that. Bendine’s subservient Finance Director at Banco do Brasil has been transferred to Petrobras; the other directors are “interim” appointments (whatever that means).

In short, Dilma has opted for the status quo. Petrobras is to be run by her puppets, people in whom she has the utmost confidence, even if the market doesn’t. Their biggest task will be convincing their boss that Petrobras needs to move on by admitting its mistakes. That won’t be easy.

Last week six formerly docile Directors announced to the world that Petrobras may have as much as R$88 billion in overvalued assets. Dilma, who wanted to keep that number under wraps, was apoplectic at this “lèse majesté” and sacked all of them. The new marionettes must wonder how long before their strings are cut.

The Curmudgeon will emit more bovine Smidgens opportunely. Stay tuned.