Petroleo Brasileiro S.A. or Petrobras PBR has announced its intention to divest assets worth $15 billion in 2015–16 in its latest 5-year plan. The Brazilian state-run energy firm’s divestment plan is divided into three parts – 30% from E&P, 30% from Downstream and the remaining 40% from Gas & Power.
According to sources, Petrobras has requested some international upstream companies, which have experience in the offshore exploration and production industry, to place bids for stakes in some concessions. The assets that are up for bidding include the company’s pre-salt blocks.
Per Bloomberg, China Petroleum & Chemical Corp. or Sinopec SNP, and Cnooc Ltd. CEO intend to purchase stakes in the aforesaid offshore exploration blocks. Apart from these Chinese firms, Royal Dutch Shell RDS.A and Statoil ASA STO are other front runners preparing bids for the pre-salt blocks sale.
Per reports, Petrobras anticipates that it will raise over $5 billion from these offshore blocks sale. The company expects to receive the bids as early as this month.
Petrobras is reportedly selling stakes in the Sagitario, Jupiter and Pao de Acucar deep-water discoveries. Production has not yet started from these projects. Also, the company is said to have removed the Carcara and Jupiter pre-salt discoveries from its 2020 production schedule, an indication that these assets may also be up for grabs.
Petrobras has been trying to raise funds and check spending to tackle its huge debt burden and the repercussions of the money-laundering scandal. The company’s new 5-year plan is focused on these goals.
Moreover, the recent announcement of a proposed change in the subsalt rule should also prove beneficial for Petrobras and bring fresh investments into Brazil’s oil and gas exploration and production industry.
Headquartered in Rio de Janeiro, Petrobras is the largest integrated energy firm in Brazil and one of the largest in Latin America. The company currently carries a Zacks Rank #3 (Hold).
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