Petrobras Mulling $5 Bln Nigerian Assets Sale

Petrobras Mulling $5 Bln Nigerian Assets Sale

Brazil’s state-run oil company Petrobras will, according to Reuters, put up its assets in Nigeria for sale. The oil company has, reportedly, hired Standard Charters to run the auction procedure.

Reuters has cited industry and banking sources which claim that Petrobras is looking to gather as much as USD 5 billion from the sale. Asian oil companies and private equity funds have been reported interested.

Petrobras arrived in Nigeria in 1998. The company possesses stakes in Agbami and Akpo blocks in the Niger Delta. The oil fields are operated by Chevron and Total, respectively.

The sale of Nigerian assets would help the company raise the part of the funds needed to fulfill its USD 236.7 billion Business & Management Plan for 2013-2017, which was approved by the Board last week.

The South American oil company will spend the largest part of the allocated sum on exploration and production. The E&P budget has been set at 147,5 billion, representing a 62% of the total amount of the budget. The new E&P budget represents an increase of US$ 15.9bn from 2012-16 BP, mainly due to the inclusion of 2017 investments that reflect the acceleration of planned production between 2016 and 2020.

The oil giant said the funds for its projects will come from operating cash flow generation (US$ 164.7bn), use of surplus cash (US$ 10.7bn), divestment and financial restructuring (US$ 9.9bn) and debt (US$ 61.3bn gross, US$ 21.4bn net).

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Offshore Energy Today Staff, March 27, 2013