Lula Dashes Petrobras Payout Hopes, Saying Investment Needed

(Bloomberg) -- Brazilian President Luiz Inacio Lula da Silva said state-owned Petroleo Brasileiro SA needs to be mindful that the nation’s people are its shareholders, appearing to double down on dividend cuts that have roiled the market. The oil producer’s shares fell.

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“What is not correct is that Petrobras, which had to distribute 45 billion reais in dividends, wants to distribute 80 billion reais — and 40 billion reais more that could have been put aside for investment, doing more research, more ships ... was not done,” he said in an interview with television network SBT.

Petrobras has been one of the top dividend payers in the oil industry in recent years, and its shares tumbled last week after the company decided against making an extraordinary payout on 2023 earnings. Lula said he wants the company helping out ordinary Brazilians instead of shareholders.

“I have a commitment with the Brazilian people to reduce the price of gasoline, the price of cooking gas, the price of diesel,” he said, adding that Petrobras can’t “only think about shareholders who invest in it.”

The shares reversed gains on Lula’s comments and closed 1.3% lower at 35.65 reais in Sao Paulo as hopes faded that the company would revisit the decision not to authorize a special dividend. Lula was meeting Monday afternoon with Petrobras Chief Executive Officer Jean Paul Prates to discuss his handling of the dividend matter.

“The market is a dinosaur, a voracious rhinoceros,” Lula said. “It wants everything for itself and nothing for the people.”

(Updates with additional comments throughout)

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