Petrobras' share price tumbles amid CEO rumors

Petrobras' preferred shares, the most heavily traded in Friday's session, had plunged by 7.65 percent in early afternoon trading.

The share price dip occurred after GloboNews television reported that the company's board of directors had named Aldemir Bendine - the current head of Banco do Brasil, also a state-controlled institution - as its new CEO.

Bendine has been Banco do Brasil's chief executive since 2009 and has spent his entire career at that financial institution.

Petrobras' board of directors is meeting Friday at the company's Sao Paulo headquarters to name a new CEO and other senior executives.

Maria das Gracas Silva Foster stepped down as Petrobras' chief executive due to a massive corruption scandal that erupted last March and has led so far to the detention of three former Petrobras directors along with executives of leading Brazilian construction and engineering firms.

Prosecutors allege that those latter firms formed a cartel to artificially drive up the price of contracts awarded by Petrobras.

As part of that scheme, the companies paid kickbacks to some Petrobras executives and funneled a portion of the money from the inflated contracts to Brazilian political parties.

The scandal has hampered Petrobras' ability to raise funds on capital markets and forced it to scale back its investment plans for the coming years.

Among other projects, Petrobras was forced to suspend work on two large refineries that were supposed to transform Brazil into an important fuel exporter in the coming years.

Petrobras, once the largest company in Latin America by market capitalization, has seen its share price plunge by 58 percent over the past four months.