Petrobras Raises $2.1 Billion Through Assets Sale
Brazilian state-controlled oil company Petróleo Brasileiro, better known as Petrobras, on Friday announced its decision to divest its share in several assets, raising $2.1 billion.
At a meeting heldFriday (August 16), Petrobras’ Board of Directors approved the following asset sale transactions totaling US$ 2.1 billion:
1. Sale of a 100% interest in Petroquímica Innova S.A. (Innova) to Videolar S.A. and its majority shareholder for R$ 870 million (approximately US$ 372 million1), the buyer to take on debt of approximately R$ 23 million.
The transaction will be put to a vote at an Extraordinary Shareholders’ Meeting to be convened in due course and, based on the opinion of the Brazilian Securities Commission, will not involve any preemptive rights for the acquisition of Innova shares by Petrobras shareholders.
Innova is a second-generation petrochemical company sited in the Petrochemical Zone of Triunfo, in the state of Rio Grande do Sul. It produces ethylbenzene, styrene and polystyrene, used in the manufacture of home appliances, disposables, elastomers, packaging, paints and fiberglass.
Completion of the transaction is subject to certain standard pre-conditions, including approval by the Brazilian Antitrust Authority (Cade).
2. Sale of the 35% stake held by Petrobras in block BC-10, known as Parque das Conchas, to the Sinochem Group for US$ 1.54 billion.
Block BC-10 is located in the Campos Basin, some 100 km off the south coast of the state of Espírito Santo, and partners include Shell, the operator with a 50% stake, and ONGC with 15%. These partners have preemptive rights which can be exercised within 30 days after notification.
Completion of the transaction is subject to the certain standard pre-conditions, including approval by the Brazilian Antitrust Authority (Cade), Brazil’s National Petroleum, Natural Gas and Biofuels Agency (ANP) and China’s National Development and Reform Commission (NDRC).
3. Signing of farm-out contracts amounting to US$ 185 million related to 100% of the Petrobras stake in blocks MC 613 (Coulomb), GB 244 (Cottonwood) and EW 910, all in production and located in the US Gulf of Mexico.
Petrobras has a 33% stake in the Coulomb field; the remaining 67% is held by Shell, which is the operator. The field is located in Mississippi Canyon Block 613 (MC 613), some 130 km off the coast of Louisiana.
Petrobras has a 100% stake in the Cottonwood field located in the Garden Banks Block 244 (GB 244), some 220 km off the coast of Texas.
Petrobras has a 60% stake in the EW910 asset; the remaining 40% is held by W&T Offshore, which is the operator.
The transaction is subject to third party preemptive rights and approval by the Bureau of Ocean Energy Management (BOEM).
4. Signing of a sales agreement for 20% of the voting capital of Companhia Energética Potiguar (CEP) with its controlling shareholder, Global Participações em Energia S.A, for a total amount of R$ 38 million (approximately US$ 16 million1), to be settled according to the terms of the contract.
CEP is responsible for the implementation, development and exploration of the Potiguar and Potiguar III thermal power plants located in Macaíba, state of Rio Grande do Norte, as well as the sale of the electrical energy generated as an Independent Electrical Energy Producer (PIEE) and electrical energy transmission. The two diesel-powered plants have a total installed capacity of 119.5 MW and have been in operation since 2009.
Completion of the transaction is subject to certain standard pre-conditions, including approval by the Brazilian Antitrust Authority (Cade). The Brazilian Electrical Energy Agency (ANEEL) will also be duly notified of the transaction.
These transactions represent an important step for Petrobras within the framework of the Divestment Program (Prodesin) in the 2013-2017 Business and Management Plan.