Brazil's Petrobras Accelerates Asset Sales to Cut Debt -- Update
July 29 2016 - 10:39AM
Dow Jones News
By Rogerio Jelmayer and Will Connors
SÃO PAULO -- Brazilian state-run energy company Petróleo
Brasileiro SA on Friday sold a controlling stake in an offshore oil
field for $2.5 billion to Norway's Statoil ASA, as Petrobras'
efforts to shed assets and pay down its massive debt gain
steam.
The BM-S-8 offshore license, which includes a substantial part
of the Carcará oil field in the Santos basin, is part of Brazil's
coveted pre-salt oil region, and represents part of one of the
world's largest oil discoveries in recent years. Statoil estimated
the license covers recoverable volumes of 700 million to 1.3
billion barrels of oil equivalent.
Despite its allure, the field is still in the exploration phase,
and for Petrobras the sale is seen as a necessary step toward its
$15 billion divestment plan to help pay off the company's
industry-leading $126 billion debt load.
Petrobras executives said Friday that they still aim to hit that
target by year's end, by prioritizing assets with "greater
potential for short-term cash generation, capital optimization and
economies of scale."
Solange da Silva Guedes, Petrobras' executive director for
exploration and production, said Friday that the company is "very
happy" with the deal, and noted that because the field in question
is still in an exploratory phase, the sale to Statoil won't have an
impact on Petrobras' oil reserves or its oil production
figures.
Statoil and Petrobras are also negotiating a memorandum of
understanding to assess other long-term initiatives.
After a slow start to the year, Ms. Guedes and Petrobras' new
chief executive Pedro Parente have recently overseen a flurry of
deals.
On Thursday, Petrobras said it entered into exclusive talks with
Mexican petrochemicals company Alpek to sell its petrochemical
units Petroquimica Suape and Citepe, though it didn't detail the
amount to be raised from the sale.
Last week the company said it would sell a controlling stake in
its fuel distribution subsidiary, known as BR Distribuidora, after
it failed to get sufficient bids for a minority stake. A deal is
likely to take place soon, according to analysts. BR Distribuidora
is Brazil's largest gas station chain, with some 7,500 outlets
across the country.
In May, Petrobras sold stakes in its Argentina and Chile
subsidiaries, and the company is in exclusive talks with Canada's
Brookfield Asset Management Inc. over the sale of its natural gas
pipeline unit, Nova Transportadora do Sudeste SA.
Despite this, before the Statoil deal Petrobras had only managed
to offload about $2 billion in assets. On Friday Petrobras chief
financial officer Ivan Monteiro said the company has "great
confidence" that it can meet its $15 billion divestment target by
the end of the year.
Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com and Will
Connors at william.connors@wsj.com
(END) Dow Jones Newswires
July 29, 2016 10:24 ET (14:24 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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