Petrobras Sells $10.3 Billion in Assets

The Brazilian Oil And Gas Giant Petrobras Signed Three Purchase And Sale Agreements To Sell Assets Worth A Total Of US $ 10.3 Billion (About R $ 40 Billion)

In 2019, considering the signed and closed transactions, the total asset sales amount to US $ 11.3 billion, Petrobras said on Thursday (25), announcing the agreements. CEO Roberto Castello Branco commented: “Today is an important day for Petrobras with the execution of three relevant transactions. The continuous management of the portfolio contributes to improving capital allocation, thereby increasing value creation for our shareholders, as well as allowing the reduction of the company’s indebtedness and cost of capital.”

The transactions include the sale of 90% of Petrobras’ stake in Transportadora Associada de Gás S.A. (TAG) to a group formed by ENGIE and the Canadian fund Caisse de Dépôt et Placement du Québec (CDPQ).

In addition, Petrobras sold a 50% stake in the Tartaruga Verde field (BM-C-36 concession) and in Module III of the Espadarte field, both located in the deep waters of the Campos Basin, off the Brazilian coast, to Petronas.

Finally, the transactions include the sale of Petrobras’ entire stake in 34 onshore producing fields in Rio Grande do Norte to Potiguar E & P S.A., a subsidiary of Petrorecôncavo.

Sale Of TAG

The value of the transaction is approximately US $ 8.6 billion, considering the adjustments agreed in the contract, and will be paid on the closing date of the transaction. This amount includes the payment by the buyer of TAG’s debts with BNDES of approximately US $ 800 million.

TAG operates in the natural gas transportation sector, currently holding long-term authorizations to operate and manage a pipeline system of approximately 4,500 km in length and 74 million m3/day of transportation capacity, located mainly in the North, Northeast, and Southeast regions of Brazil. Petrobras will continue to use the natural gas transportation services provided by TAG, through existing contracts between the two companies, without impacts on its operations and the delivery of gas to distributors and other customers.

Tartaruga Verde And Module III Of The Espadarte Field

The value of this transaction is US $ 1.29 billion, to be paid in two installments. About US $ 258.7 million was paid immediately and US $ 1.034 billion on the closing date of the transaction, subject to adjustments. Petrobras will retain a 50% stake and the operation of the fields.

The Tartaruga Verde field began operations on June 22, 2018, via FPSO Cidade de Campos dos Goytacazes and currently produces approximately 103 thousand bpd of oil and 1.2 million m³/day of gas.

In a separate statement on Friday, Petronas of Malaysia said: “The acquisition of a stake in Tartaruga Verde and Module III of the Espadarte fields is an important milestone for Petronas as the company diversifies and expands its oil business portfolio in South America.”

Module III is an area of the Espadarte field to be developed in an integrated manner with the Tartaruga Verde field, with first oil expected in 2021.

Sale Of 34 Onshore Producing Fields

The total value of the third transaction is US $ 384.2 million. It will be paid in three installments: i) US $ 28.8 million was paid on Thursday; ii) US $ 293.9 million on the closing date, subject to adjustments; and (iii) US $ 61.5 million as an earn-out linked to the approval by the National Agency of Petroleum, Natural Gas, and Biofuels (ANP) of the extension of the contractual term of 10 of the 34 concessions of the operation.