By Jeffrey T. Lewis

SÃO PAULO--Shares of Brazil's state-controlled oil company, Petróleo Brasileiro SA, declined Wednesday after four members of its board said they're leaving following the nomination by President Jair Bolsonaro of a new chief executive officer to replace current CEO Roberto Castello Branco.

The preferred shares of Petrobras, as the company is known, were down 4% in late-morning trading, while Brazil's benchmark Bovespa stocks index was down 1.2% at the same time.

Mr. Bolsonaro in February nominated army general Joaquim Silva e Luna to replace Mr. Castello Branco, a technocrat praised by analysts for achievements since becoming CEO in Jan. 2019. Before the nomination, Mr. Bolsonaro had said an almost 10% increase in the price of gasoline and an almost 15% increase in the price of diesel fuel that the company had announced was excessive and promised changes.

Any replacement for the CEO position requires the approval of Petrobras' board, and though the government nominates a majority of the group, several are nominally independent. Mr. Castello Branco had been widely expected to remain as CEO after his current term ends on March 20, but he has since said that he'll leave when his term is up.

On Tuesday evening Petrobras said four board members, João Cox Neto, Nivio Ziviani, Paulo Cesar de Souza e Silva and Omar Carneiro da Cunha Sobrinho, intend to leave the board.

"Due to the recent events related to changes in Petrobras's senior management, and the positions expressed by the largest representative of the controlling shareholder of Petrobras, I do not feel in a position to accept the renewal of my name" as a member of the board, Mr. Carneiro da Cunha said in the Petrobras statement.

While it's still not clear if Mr. Silva e Luna will in fact replace Mr. Castello Branco because of requirements in company bylaws regarding experience in the sector, the turmoil surrounding the company's top manager led to a more than 20% decline in Petrobras' share price the first trading day after Mr. Bolsonaro nominated the general.

Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com

(END) Dow Jones Newswires

03-03-21 1011ET