Petrobras Will Issue R$3 Billion in Debentures to Fund Oil Exploration

Petrobras Announced That Its Board of Directors Approved a Debenture Issuance in the Initial Amount of 3 Billion Reais

Petrobras reported that the objective of the board approving the issuance of debentures in the amount of 3 billion reais was to finance the exploration and production of oil and gas fields and to strengthen its cash position.

The state-owned company announced the news on the night of Tuesday, July 23. The company also stated that it expects to place at least 1 billion reais in the operation and that it may further increase the operation by up to 20% of the initial amount, or up to 600 million reais.

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The issuance of the debentures will be announced in up to three series, with the first two maturing in September 2029 and September 2034, and the third in September 2026.

According to the state-owned company, the debentures of the third series, which will not have tax incentives, should allocate resources to strengthen cash and for the ordinary course of the company’s business.

“A debenture is a credit instrument representing a loan that a company makes to third parties and that guarantees its holders rights against the issuer, established in the issuance deed”.

Petrobras Sells 35% of BR Distribuidora for 2.5 Billion Dollars

Liquidation of national assets continues to accelerate; on Tuesday, July 23, Petrobras, under the leadership of Roberto Castello Branco, sold 35% of BR Distribuidora for US$ 2.5 billion, about R$ 9 billion; with the operation, Petrobras retained 37%, and thus, BR Distribuidora became a private company.

The state-owned company reduced its stake from 71.25% to 45.25% in the company. In practice, the state stops controlling BR.

The transaction attracted 160 investors from various countries, including the United Kingdom, Canada, and the United States, among others. The banks involved in the operation are Merril Lynch, Citi, Credit Suisse, JP Morgan, Santander, Itaú, and XP.

The resources are expected to enter the company’s cash to help reduce its indebtedness.

Operators are Expected to Drill Around 250 Development Wells in 2020. According to the National Petroleum Agency – ANP, 65 of the 250 wells will be drilled in the Santos Basin by operators next year. The remaining basins with development responsibilities scheduled for 2020 are Potiguar (53), Sergipe (46), Campos (41), Espírito Santo (29), Recôncavo (13), Parnaíba (3), and Alagoas (3).