Brazil’s PetroReconcavo Striking It Big With UVA Darden-dominated C-Suite
By Dave Hendrick
North of the bustling Brazilian cities of Sao Paulo and Rio de Janeiro, in the state of Bahia, the small oil company PetroReconcavo has been steadily growing for years, increasing revenue and production in a country whose oil industry is still dominated by a single, government-controlled entity.
The company has achieved the growth — it’s now the largest independent onshore producer in Brazil — in part with lessons gleaned from the University of Virginia Darden School of Business, as its two top executives are both alumni of the School.
The power of the Darden network helped propel the events forward.
CEO Marcelo Magalhaes (MBA ’02) said he likely never would have heard of the Darden School were it not for an active group of Darden alumni in Bahia, a network that he believes began with his friend Adriano Borges (MBA ’98), who urged some of his countrymen to take a look at the School.
“In Brazil, we don’t have a lot of strong alumni mentality,” Magalhaes said. “Usually, you don’t have a huge connection to the school or university you attended, but there is this connection to Darden.”
An entrepreneur in Brazil, Magalhaes toured a number of business schools in the U.S. when he decided to get his MBA, but was won over by the Darden Grounds and seeing the case method in action.
“I have wonderful memories of Charlottesville,” Magalhaes said. “My oldest kid was six months old and mostly learned how to walk on the Darden Grounds.”
After Darden, Magalhaes took a position with the boutique consulting firm Mainspring, which was soon after purchased by IBM, and worked as a strategy and business development consultant in the Boston area for six years.
In 2007, Magalhaes took a brief trip back to Bahia to spend a few days away from the Boston winter, and his brother alerted him to an oil company in the area looking for a leader. The company was half-owned by the Houston-based PetroSantander Inc., in a joint venture with local groups, and would benefit from someone who was fluent in multiple cultures.
“There was a need to hire someone that the locals know well, but someone that Americans would trust, who had the proper education and business experience,” Magalhaes said. “The fact that I was born in Bahia and had lived in the United States was important to them.”
After a series of interviews and some deliberation, Magalhaes took the CEO position at PetroReconcavo — a company specializing in what’s known as mature oil field recovery — and has held it ever since, overseeing a doubling of production and three-fold increase in revenue despite knowing very little about the oil world when he took the job.
“The main characteristic of a strategy consultant is to be a good problem solver,” Magalhaes said. “What the company needed was not an oil man; it needed someone who could provide the structure and strategy and assemble a good team.”
Indeed, Magalhaes says the success he and his Darden classmate, CFO Rafael Cunha (MBA ’03), have helped build is largely due to the people they’ve been able to surround themselves with.
“We now have this large group of young engineers and business people, and that’s the main reason we have been performing very well,” Magalhaes said. “It all goes back to my Darden classes on organizational behavior and operations and finance.”
When Magalhaes and Cunha engage in financial modeling exercises together, the CEO said they both go right back to the lessons learned in Professor Yiorgos Allayannis’ finance class.
A third Darden alum, Charles de Mestral (MBA ‘78), was also a board member of the company for a period.
Having benefited from the Darden network previously, Magalhaes said he is eager to continue to engage with the School, and recently met with a group of Darden students on a Global Business Experience in Rio.
“I didn’t have the opportunity to travel as part of my Darden program, but I was very happy to see the group in Rio. We had more than a dozen students coming to Brazil and visiting the Amazon and getting involved with the Olympic Games organization,” Magalhaes said. “I had very good conversations with them.”
Magalhaes continues to expand his connections to Darden and UVA. His nephew, Victor Magalhaes (MBA ’16), graduated from Darden in May and his son, the one who learned how to walk on the Darden Grounds, is an 11th grader considering UVA for college.
The University of Virginia Darden School of Business delivers the world’s best business education experience to prepare entrepreneurial, global and responsible leaders through its MBA, Ph.D. and Executive Education programs. Darden’s top-ranked faculty is renowned for teaching excellence and advances practical business knowledge through research. Darden was established in 1955 at the University of Virginia, a top public university founded by Thomas Jefferson in 1819 in Charlottesville, Virginia.
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