The chief executive and other senior management at Brazil's Petrobras resigned on Wednesday (February 4) amid a festering corruption scandal, sending shares higher as the government scrambled to find replacements capable of restoring investor confidence in the state-run oil company.
The firm's board of directors will meet on Friday February 6 to elect a new management team to replace CEO Maria das Graças Foster and five other senior directors, Petrobras said in a securities filing.
Petrobras shares rose more than 6 percent in early trading in Sao Paulo on the news, extending a more than 15 percent gain on Tuesday (February 3) that began with reports that Brazilian President Dilma Rousseff had decided to dismiss Foster.
On taking up her post as CEO in February 2012, Foster, promised to uphold rigid targets and operations, but her leadership has rather been characterised by the diversion of huge sums and a decline in profit.
Investors have been betting that new leadership will help restore credibility to the scandal-tainted firm and ramp up production and boost profits.
Pressure has been mounting on Rousseff to clean up Petrobras, whose reputation suffered with the arrest and testimony of three former senior executives and three dozen others, including executives of major suppliers.
Police say they have uncovered a price-fixing, bribery and political kickback scheme that allegedly benefited Rousseff's ruling Workers' Party as well as others.
The illegal activity, authorities allege, diverted at least $3.7 billion and perhaps more than $28 billion from Petrobras coffers.