Petrobras Could Be Selling Mature Oil Fields To EIG-Backed Bidder

Petrobras has entered exclusive talks with Ouro Preto Oleo e Gas, a company backed by EIG, for the sale of two mature oil field clusters, Reuters reports, citing sources in the know. The EIG-backed bid was the highest one Petrobras received, the sources said, beating Trident Energy, which was financially backed by Warburg Pincus.

For EIG this would be the second recent acquisition in Brazil, after the private equity major earlier this year bought port operator Prumo Logistica. The Brazilian company operates the Acu port, which is in proximity to the Pampo and Enchova field clusters off the Rio de Janeiro coast, in the prolific Campos Basin. The clusters span nine fields with combined production of 38,600 bpd. The production rights to the clusters will be sold until 2025.

The deal’s size has not been disclosed, but it could bring some US$1 billion into Petrobras’ coffers, which would be a very welcome addition to previous divestment proceeds that will go towards reducing the company’s still sizeable debt pile, which as of last year was still the highest in the industry. In 2017 and 2018, Petrobras plans to sell assets worth US$21 billion.

Related: Is The Solar Industry Really In Trouble?

Earlier this week Petrobras announced it will also put up for sale its stake in four other offshore blocks. The stakes cover exploration, development, and production rights in the four concessions.

The Brazilian energy major is also selling its stakes in four refineries and assets abroad to slim down its debt and improve its position, which was badly damaged, not just by the 2014 price collapse but by the biggest corruption scandal in Brazil’s history that saw senior Petrobras executives receive prison sentences for partaking in a graft scheme involving a number of top politicians as well. The scheme saw company executives embezzle billions of dollars between 2003 and 2013.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

• The Regulation That Could Push Oil To $200
• Iran Vows ‘Equal Countermeasures’ If U.S. Tries To Block Oil Exports
• Can China Replicate The U.S. Shale Boom?