Can Brazil's Oil Giant Be Saved?

Brazil needs to do something about Petroleo Brasileiro SA, the huge and mismanaged state-controlled oil company now mired in controversy.

Consider the former senior Petrobras executive who was arrested last month for his alleged involvement with a gang that laundered almost 10 billion reais ($4.5 billion). Or a Dutch ship supplier that is being investigated for claims that it bribed Petrobras officials to win business. Then there is the investigation of the awful deals in which the company grossly overpaid for a U.S. refinery and sold another in Argentina far too cheaply.