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Strong Crude Inventory Draw Sends Oil Higher

Strong Crude Inventory Draw Sends Oil Higher

Oil prices rose on Wednesday…

Petrobras Begins Upstream Oil, Gas Assets Sale

PBR

Petrobras has launched the binding phase of the sale of offshore upstream oil and gas assets in the Espírito Santo Basin, Brazil’s state-owned energy firm said on Monday.  

At the beginning of July, Petrobras said it was putting up for sale two operating shallow-water offshore gas fields and a deepwater oil exploration concession in the Espírito Santo Basin, as part of efforts to optimize its portfolio and improve capital allocation.

etrobras launched last month the opportunity disclosure stage—the so-called teaser—for the sale of its 100-percent stakes in the gas fields Peroá and Cangoá, and its 88.9-percent interest in the deepwater Malombe oil field, where oil was discovered in 2011.

The Brazilian state-held firm now enters the binding stage of the sale process, saying that it will send details of the sales process, as well as guidelines for due diligence and binding proposals, to the potential interested buyers who have qualified to take part in the binding phase.  

At the beginning of this year, reports emerged that Brazil was pushing for major state-owned companies, including Petrobras, to privatize some subsidiaries as the Brazilian government of new far-right President Jair Bolsonaro looks to raise US$20 billion in state asset sales in 2019.

“The privatization of the company is not in question. I do not have a mandate to think about it,” Petrobras’ new chief executive Roberto Castello Branco—who was tapped by Bolsonaro to lead the company—said in November.

Related: Oil Could Plunge By $30 If China Restores Iranian Oil Imports

Yet, the sale of non-core assets at Petrobras was expected to continue under Castello Branco, whose strategic vision for the company includes “portfolio management, capital cost reduction, and relentless pursuit of cost reduction.”

In late April, Petrobras approved the sale of several refineries as part of its divestment plan, and last month, it struck a deal with the Brazilian antitrust regulator that will allow it to sell those downstream assets in a bid, the company said, to encourage greater competition in the industry.  

In early July, Petrobras announced the start of the non-binding phase for the sale of its total equity interest in 14 onshore exploration and production concessions in Bahia state, jointly designated as the Recôncavo Cluster.

By Tsvetana Paraskova for Oilprice.com

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