Brazil’s Petrobras to sell Africa stake to Geneva-based Vitol

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Petróleo Brasileiro S.A (Petrobras), a Brazilian state-owned energy company is close to announcing the sale of its stake in an African oil and gas exploration business to a group of investors led by Vitol Group, a Geneva-based energy and trading company.

Sources told Bloomberg that Petróleo Brasileiro’s partners in the African operations- Brazil’s Banco BTG Pactual and the U.K.’s Helios Investment Partners, have decided to keep their share of the business.

The sources, who asked not to be identified because the discussions are private, revealed the deal will value Petróleo Brasileiro’s stake at about $1.5 billion and may be announced in November 2018. They note that no decisions have been made and the deal still had the potential to fall apart.

The state-owned energy company, which is working to offload $21 billion of its assets by the end of 2018 after its debt rose above $100 billion in 2017, added the African business unit to its divestment portfolio in May 2017. Petrobras agreed to sell a stake in a Brazilian oil field to Norway’s Equinor ASA that’s valued at as much as $2.9 billion. Anonymous sources also said the oil company is planning to exit its 4,500-kilometer (2,800-mile) natural-gas pipeline system for as much as $9 billion.

People familiar with the matter told Bloomberg that Petrobras and its two partners had previously considered selling their stakes together, valuing the African oil and gas exploration operations at about $3 billion.

Since the start of 2018, the gain in Brent crude oil prices has given Petrobras room to cut debt even when the company hasn’t reached its divestment target. So far, the oil company has sold less than a third of its targets.

 

 

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