May 18, 2016 / 12:17 AM / 2 years ago

UPDATE 1-Petrobras to tap Parente as CEO this week, sources say

(Adds details on appointment, background throughout)

By Guillermo Parra-Bernal and Lisandra Paraguassu

SAO PAULO/BRASILIA, May 17 (Reuters) - State-controlled Petróleo Brasileiro SA will appoint former presidential chief of staff Pedro Parente as chief executive officer, as Brazil’s new interim government seeks to stamp its authority on the debt-laden oil producer, two sources with knowledge of the decision said on Tuesday.

The appointment of Parente, who was formerly President Fernando Henrique Cardoso’s chief of staff and currently is the chairman of financial bourse BM&FBovespa SA, could be announced as soon as Friday, said the first source, who asked for anonymity due to the sensitivity of the issue.

Parente is currently outside Brazil, both sources added.

As the largest shareholder in the company known as Petrobras, Brazil’s federal government picks the oil producer’s CEO, who operates with relative autonomy and often has a direct channel to the president.

Temer wants Parente to help turn around Petrobras, which is the world’s most indebted oil firm and is struggling with the impact of slumping prices and a corruption scandal that has restricted access to financing.

Temer took office on Thursday after the Senate suspended President Dilma Rousseff and put her on trial on charges of breaking budget laws.

Rio de Janeiro-based Petrobras did not have an immediate comment. Parente could not be reached for comment.

According to the sources, Parente’s immediate tasks include speeding up a $15.5 billion asset sale plan to raise cash and repay debt, cutting costs and rooting out corruption.

A probe known as “Operation Car Wash” found that contractors overcharged Petrobras for work, using the excess as bribes that were funneled to ruling coalition politicians.

Parente would replace Aldemir Bendine, who has been running Petrobras since January 2015. According to the first source, Bendine has already been notified of the decision.

According to the second source, Temer and his aides are discussing ways to retain Chief Financial Officer Ivan Monteiro, a Bendine ally who on Tuesday conducted a successful sale of $6.75 billion in five- and 10-year bonds for the company, the second source added. (Editing by Leslie Adler and Daniel Flynn)

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