(Adds detail on Ferreira; context)
SAO PAULO, March 27 (Reuters) - Brazil’s government nominated Murilo Ferreira, chief executive officer of miner Vale SA, to head the board of directors of Petroleo Brasileiro SA, the embattled state-run oil company said on Friday.
Ferreira will replace former Brazilian finance minister Guido Mantega, who resigned Thursday. Luciano Coutinho, president of state development bank BNDES, was named interim chairman.
If confirmed at an April 29 shareholders meeting, Ferreira will hold two of the top positions at Brazil’s two largest companies and have a say in how to invest nearly $55 billion a year.
Ferreira will have to steer Vale and Petrobras, as the oil company is known, through a plunge in oil and iron ore .IO62-CNI=SI prices while trying to clean up a price-fixing, bribery and political kick-back scheme that has cut Petrobras off from capital to fund a massive expansion plan.
Ferreira will also be watched for potential conflicts of interest. Vale, Brazil’s largest diesel consumer, pays Petrobras about 1 billion reais ($308 million) a year to fuel its mines and railways. Meanwhile, Petrobras buys raw materials from Vale for its fertilizer plants.
“Petrobras and Vale have some businesses in common but they are known and irrelevant,” said a Brazilian mining executive with direct knowledge of the companies. “What exists is a conflict of time. Murilo has more than enough problems at Vale to take on Petrobras’ problems too.”
Ferreira’s election is almost certain because Brazil’s government, which nominated him in hopes of boosting the company’s credibility, owns a majority of Petrobras voting stock.
The government also nominated to the board Ivan Monteiro, Petrobras’ chief financial officer, to replace Miriam Belchior, a former planning minister..
The biggest problem from the scandal is the need to publish audited fourth-quarter financial results before the delay forces default on $54 billion in bonds.
Results have been delayed as Petrobras tries to figure out how to reduce the value of assets impaired by corruption.
Since its 1997 privatization, Vale has focused more on increasing shareholder returns while the government used Petrobras for development goals. Petrobras is the world’s most-indebted and least-profitable major oil company.
A spokeswoman for Vale said the appointment has no impact on Vale, adding former Vale CEO Roger Agnelli was a Petrobras director.
Petrobras preferred shares, its most-traded class of stock, fell 0.9 percent in afternoon trading in Sao Paulo. Vale’s main shares fell 2.9 percent. (Reporting by Gustavo Bonato, Caroline Stauffer, Jeb Blount; additional reporting by Stephen Eisenhammer, Editing by W Simon and Diane Craft)