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OTC 2017: Petrobras oil giant will put $42 billion worth on offer including refineries

Houston Chronicle/ Michael Ciaglo

Pedro Parente Petrobras' CEO, said Petrobras adding refineries to asset sales as CEO seeks cash, wants to leave Petrobras' troubles in the past.

Petroleumworld 05 03 2017

The Petrobras asset sales are far from over, and they will now include refineries.

Pedro Parente, the chief executive officer on a mission to get the Brazilian oil giant back on its feet, plans to put another 40 assets on offer, worth about $42 billion, as he seeks to reduce a massive debt load and develop some of the world's largest oil finds this century.

The value, double the divestiture goal for this year and the next, should ensure the target is met, Parente said in an interview in Houston. The company has already raised $13.6 billion since 2015 by selling oil fields, pipelines and other assets.

“Soon, really soon, the company will relaunch the program at full speed to meet our goal of $21 billion of divestitures and partnerships in 2017 and 2018,” Parent said. “The assets are more or less the same, but now we'll also bring refining to the conversation.”

Petrobras is unloading assets to slash about $119 billion of debt, the most of any publicly trade oil company, as it strives to rebuild investor confidence after a massive pay-to-play scandal and the lowering of its debt rating to junk in 2015. Shares rose 1.8 percent to 14.22 reais at 11:17 a.m. in Sao Paulo.

While the new list of assets for sale will include refineries that were cited as possible targets in the company's business plan, that idea had never advanced before, Parente said. Petroleo Brasileiro SA , as the Rio de Janeiro-based producer is formally known, will start publishing the infrastructure and oil fields up for sale in weeks and sees enormous demand from international oil companies looking to expand in Brazil, he said.

Sales suspended by court injunctions, such as the BR Distribuidora fuel unit and the Bauna field, are on the list but the company will wait until the legal hurdles are solved before making any announcement on those assets. Petrobras is still looking to sell its stake in petrochemicals producer Braskem SA once it resolves an “obstacle” related to a shareholders agreement, he said.

Brazil's audit court halted the process late last year, demanding more transparency to guarantee the most competition possible. In March the court allowed sales to resume under new procedures. A separate court in Sergipe state continues to challenge some of the deals, which Petrobras has said it will fight to overturn.

“That's how privatizations happen in Brazil, unfortunately, with an ideological stance,” Parente said. “This has happened in the past, and at the end of the day the company was able to make its case.”

Story by Sabrina Valle and Peter Millard from Bloomberg.

bloomberg.com 05 02 2017

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