Bloomberg News

Top Woman in Oil to Oversee $225 Billion Plan at Petrobras

February 01, 2012

(Updates share price increase in fifth paragraph.)

Jan. 24 (Bloomberg) -- Maria das Gracas Foster, the first woman named to run one of the world’s top five oil companies, will take over the industry’s largest investment plan with Petroleo Brasileiro SA’s $225 billion proposal to more than double its output by the end of the decade.

Petrobras, as the world’s fifth-largest oil producer by market value is known, yesterday announced the decision to promote Foster to chief executive officer after Jose Sergio Gabrielli resigned to pursue a career in politics. A 34-year veteran of the Rio de Janeiro-based company, Foster currently runs the natural-gas and power division, Petrobras’s fastest growing area last year.

Foster, 58, takes on the task of drilling for oil as deep as 6 kilometers (3.7 miles) beneath the Atlantic Ocean’s seabed. Petrobras missed its 2011 production target because of equipment delays and more regulatory scrutiny after the 2010 U.S. Gulf of Mexico oil spill. The stock surged to the highest in more than eight months after the CEO change announcement yesterday and extended gains today.

“The market seems relieved that Petrobras has not been subject to political whims, but rather has chosen a career employee with technical skill to be CEO,” Christopher Palmer, who helps manage $2.5 billion of assets as London-based director of global emerging markets for Henderson Global Investors Ltd., said in an e-mail yesterday. “This indicates that execution of projects is now a top priority.”

Petrobras rose 1 percent to 25.40 reais at 5:47 p.m. in Sao Paulo trading, after gaining 3.8 percent yesterday.

‘Risen From Within’

A chemical engineer by training, Foster joined Petrobras as an intern in 1978 and, except for a three-year stint working for the government, has spent her entire career with the company. She has held management positions in each of the company’s divisions.

“She’s worked on the technical side, so she’s risen up from within Petrobras,” said Bob Fryklund, a former director of ConocoPhillip’s Brazil unit who worked with Foster on a project to develop gas fields in the Amazon. “She worked in the ministry, so she has good skills navigating government.”

President Dilma Rousseff’s nomination of Foster follows a drive to increase female participation in her government. Brazil’s first woman president, Rousseff has appointed at least eight women to cabinet posts since she took office a year ago.

Working for Rousseff

Foster first met Rousseff when the president was energy secretary for the state of Rio Grande do Sul. In 2003, Foster went to work for her as head of Brazil’s oil and natural gas division while Rousseff was its energy minister.

The Foster nomination will be voted on by Petrobras’s board at a Feb. 9 meeting. A majority of the company’s board members are named by the Brazilian government, which owns 51 percent of the voting shares in Petrobras. The company said yesterday Foster wasn’t available for an interview.

In a interview last year at her 23rd-floor office overlooking Rio’s Guanabara Bay, Foster said she works seven days a week from dawn until late night and expects all who work for her to be as dedicated and disciplined. She is married and has two adult children and a granddaughter.

“I like to joke that we have just one work day here at Petrobras: it starts on Monday and ends on Saturday,” Foster said last January. “Well, sometimes it ends on Sunday.”

Her work habits earned her the nickname Caveirao, the Brazilian name for armored vehicles police use in Rio to plow into crime-ridden shantytowns.

Early Childhood

Foster spent her early childhood in Morro do Adeus, a working class neighborhood on the outskirts of Rio that is part of Complexo do Alemao, which turned into a sprawling slum over the past two decades because of drug trafficking. She collected recyclable cans and paper to pay for school supplies, according to Petrobras’s press office in Rio.

Foster will take over from Gabrielli, who has overseen development of Petrobras’s Lula offshore oil discovery, the biggest find in the Americas in more than three decades. He was also in charge when the company raised $70 billion in the world’s largest share sale in September 2010, helping finance its production increases.

Gabrielli, 62, joined Petrobras in 2003 as chief financial officer and was promoted to CEO in 2005. He leaves the position to join the government in his home state of Bahia in northeastern Brazil, according to an e-mailed statement from the governor’s press office yesterday.

Profit Growth

Under Foster, profit at Petrobras’s gas and power business more than doubled in the first nine months of the year as she sought to expand sales among industrial clients and fertilizer producers who use gas.

One exception to Foster’s relentless work schedule is her participation in the Uniao da Ilha samba school, which puts on one of Rio’s annual Carnival parades.

“Petrobras and my samba school are my two passions,” said Foster, who grew up in Rio. She also sports two small star tattoos on her left wrist that she declined to explain the meaning of when asked. “I have others that are not visible,” she said.

-- With assistance from Rodrigo Orihuela in Rio de Janeiro. Editors: Tina Davis, Charles Siler

To contact the reporters on this story: Adriana Brasileiro in Rio de Janeiro at abrasileiro@bloomberg.net; Peter Millard in Rio de Janeiro at pmillard1@bloomberg.net

To contact the editor responsible for this story: Carlos Caminada at Ccaminada1@bloomberg.net


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