23-11-2017

BN Americas – 23.11.17

Brazil’s Petrobras is pushing ahead with its asset divestments, announcing this week that it has signed an agreement with local energy company Eneva for the sale of the Azulão field’s exploration and production rights for US$54.5mn.

The onshore asset, which was declared commercial in May 2004, is located 290km east of Manaus, in the northern state of Amazonas.

According to Eneva, Azulão has recoverable volumes of natural gas with potential to supply a thermoelectric plant, similar to the reservoir-to-wire model implemented by the company in the Paranaíba basin.

The agreement is the first to be closed under Petrobras’ 2017-18 divestment plan, which involves the sale of US$21bn in assets.

The deal is also the first under the new system established by federal audit court TCU for the state-run oil company’s divestments.

The previous divestment plan for 2015-16 faced difficulties not only due to irregularities encountered by the TCU but also because of several lawsuits filed by oil workers unions that managed to suspend some of the transactions.

That was the case of the operations involving Nova Transportadora do Sudeste (NTS), Liquigás, Gaspetro, the UFN III nitrogen fertilizer unit, Petroquímica Suape and Citepe, BR Distribuidora, the BM-S-8 offshore block, the Baúna, Tartaruga Verde and Lapa and Iara offshore fields and Sergipe and Ceará shallow water and onshore assets.

Petrobras succeeded in obtaining court rulings to conclude some of those sales.

In December 2015, Gaspetro was sold to Japan’s Mitsui for US$593mn and NTS last April was bought by Canada’s Brookfield (US$5.2bn), while the BM-S-8 block, where the Carcará discovery is located, is on the verge of having its sale process suspension terminated by the courts, allowing Petrobras to sell it to Norway’s Statoil.

The same procedure has been adopted in the case of Petroquímica Suape and Citepe’s sale to Mexico’s Alpek (US$385mn), the Lapa and Iara fields to France’s Total (US$2.2bn) and Liquigás to local company Ultrapar (US$840mn). None of these transactions, however, has been formally concluded, according to Petrobras.

On Thursday, the oil company disclosed that Brazil’s antitrust body Cade has extended the analysis period for evaluating the Liquigás’ sale.

Also as part of its previous divestment plan, Petrobras sold its Argentine (US$897mn) and Chilean (US$464mn) subsidiaries in addition to its assets in Argentina’s Austral basin (US$101mn), the Nansei Sekiyu refinery in Japan (US$165mn) and its Guarani (US$203mn) and Nova Fronteira (US$133mn) sugar-alcohol companies.

THE FUTURE

Meanwhile, the UFN III and the Lapa and Iara fields sale processes have been resumed, while the Ceará and Sergipe assets have been included in new packages that also contain Rio Grande do Norte, Rio de Janeiro and São Paulo state assets.

The processes for the Baúna and Tartaruga fields and BR Distribuidora’s operations, however, ended up being canceled after Petrobras failed to gain court authorization to proceed with their sale.

While the transaction for the Santos basin offshore fields with Australia’s Karoon seems to have no near term prospect of materializing, the BR Distribuidora divestment strategy changed and now Petrobras is preparing to offload a minority stake in the company.

In terms of oil and gas fields, the new divestment plan also calls for the sale of the Juruá and Maromba assets in the Solimões (onshore) and Campos (offshore) basins, and the Riacho da Forquilha, Buracica and Miranga onshore assets (Bahia and Rio Grande do Norte).

Petrobras is also working on the sale of its Paraguayan downstream assets, its gas logistics company Transportadora Associada de Gas (TAG) and subsidiary Petrobras Oil & Gas BV (POGBV), which owns several assets in Africa.

“In general, Petrobras should be successful in stopping the lawsuits aiming to halt its divestment program currently underway,” Paulo Valois, partner at law firm Schmidt Valois, told BNamericas.

 

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