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

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(Bloomberg) — Petrobras introduced one other blockbuster dividend fee, rewarding shareholders at a second of rising concern that the bonanza might 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 authorized dividends of three.3489 reais per share, totaling 43.7 billion reais ($8.5 billion), in response to a regulatory submitting Thursday.

Whereas the quantity represents a slowdown from the colossal $17 billion payout the earlier quarter, it means the entire for 2022 already surpasses final yr’s report 101.4 billion reais. Politicians from Washington to London have been lashing out at oil firms for funneling windfall earnings to traders whereas customers endure from larger vitality costs.

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

Brazil’s foremost oil union, often called FUP, and an affiliation of oil staff who’re additionally shareholders, Anapetro, pledged to contest the huge dividends in courtroom earlier than it was introduced. They argue that the quantity is far greater 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 good points after rising by as a lot as 1.8% earlier.

Petroleo Brasileiro SA, as it’s formally recognized, was on the middle of Brazil’s presidential elections this yr. Its strong earnings 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 is going to occur with the prevailing dividend coverage.

The brand new administration “has overtly 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 ought to be on capital allocation and pricing coverage for fuels offered domestically.”

(Updates with further info on dividends)

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