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Thursday
Feb052015

Report: Petrobras CEO and five executives resign

Petrobras CEO Maria das Graças Foster has reportedly resigned from Brazil's state-owned oil giantPetrobras CEO Maria das Graças Foster has resigned her post along with five other executives, the state owned company said Wednesday in a securities filing.

Foster’s resignation is expected to be effective immediately.

Petrobras board members will meet Friday to begin choosing replacements, the Wall Street Journal said. The names of the other executives resigning have not been disclosed.

Brazilian news sources began reporting Tuesday that Brazilian president Dilma Rousseff had decided to replace Foster. She took the reigns at Petrobras in 2012 and has said she offered her resignation multiple times in the past two years.

Petrobras shares climbed 15 percent Tuesday on the news, the largest one-day rally for the company in over a decade.

The news comes as investors wait for Petrobras to release an audited version of its long delayed third quarter results. Petrobras released its unaudited third quarter results in January but disappointed investors by refusing to take write downs tied to alleged corruption.

The company’s oil and gas production has surged under Foster’s leadership but her tenure has been marred by an ongoing corruption scandal that has already landed three former executives in jail.

In September, former Petrobras executive Paulo Roberto Costa admitted taking a $636,000 bribe in connection with the company’s 2006 purchase of a Texas refinery. Costa alleged that executives were skimming as much as three percent off the price of contracts and giving the money to political organizations, including campaigns run by transportation chief and politician Sergio Machado.

Machado has denied any wrongdoing.

Foster, 61, has not been implicated in the scandal and has maintained that she was not aware of the activity until police launched a probe into the company.

The U.S. Department of Justice and the Securities and Exchange Commission have also reportedly opened investigations into the company, although the two agencies have not commented.

The scale of the corruption is still unknown. Brazilian authorities have claimed kickback and bribery schemes could have diverted from $3.7 billion to $28 billion from the company.

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Nicolas Torres is a staff writer for Petro Global News, where a version of this post first appeared.