Petrobras Looking at $10 Billion in Divestments, Including Pipeline Unit
RIO DE JANEIRO (Reuters) – Roberto Castello Branco, the chief executive of Brazil’s Petroleo Brasileiro SA, said Friday he believes the company will divest $10 billion in assets in the first four months of 2019, aided by the sale of a major pipeline unit.
At the same event in Rio de Janeiro, the nation’s economy minister, Paulo Guedes, said Petrobras, as the firm is known, has almost settled on terms with the government regarding a dispute over an oil-producing zone known as the transfer-of-rights area. The resolution of that disagreement would result in billions of dollars more being added to the company’s coffers.
Petrobras is aggressively divesting non-core assets in a bid to reduce its hefty debt load, which has steadily fallen in recent years but is still above that of its peers.
Sources told Reuters that the firm is accepting the final round of bids for its TAG gas pipeline unit on April 2, which is expected to bring in several billion dollars and will likely be the company’s largest-ever asset sale.
Transfer-of-Rights
The transfer-of-rights area is the result of a 2010 deal between the Brazilian government and Petrobras related to a huge share offering that would have diluted the government’s stake.
To maintain control of the company, the government sold Petrobras the rights to explore 5 billion barrels of oil in an area off Brazil’s coast for $19.73 billion (74.8 billion real) at the time. With that money, it bought additional Petrobras shares.
But Brazil’s oil regulator now estimates there are around 17 billion barrels of recoverable oil in the area, and the government is seeking to auction rights for the exploration of the excess oil. First, the two sides need to resolve the dispute over the area, which will result in a significant payment to Petrobras.
Related News
Related News
- Phillips 66 to Shut LA Oil Refinery, Ending Major Gasoline Output Amid Supply Concerns
- FERC Sides with Williams in Texas-Louisiana Pipeline Dispute with Energy Transfer
- U.S. Appeals Court Blocks Kinder Morgan’s Tennessee Pipeline Permits
- ConocoPhillips Eyes Sale of $1 Billion Permian Assets Amid Marathon Acquisition
- Valero Considers All Options, Including Sale, for California Refineries Amid Regulatory Pressure
- U.S. Appeals Court Blocks Kinder Morgan’s Tennessee Pipeline Permits
- Malaysia’s Oil Exports to China Surge Amid Broader Import Decline
- U.S. LNG Export Growth Faces Uncertainty as Trump’s Tariff Proposal Looms, Analysts Say
- Marathon Oil to Lay Off Over 500 Texas Workers Ahead of ConocoPhillips Merger
- Valero Considers All Options, Including Sale, for California Refineries Amid Regulatory Pressure
Comments