Petrobras to sell ethanol and petrochemicals assets for $587 mn

Brazil's state-run oil giant, Petroleo Brasileiro SA (Petrobras), yesterday said that it has agreed to sell its ethanol and petrochemicals assets for $587 million.

Petrobras will sell its 46-per cent stake in of its ethanol unit Guarani SA to its French partner Tereos SA for $202 million and two petrochemical companies, Petroquimica Suape and Citepe, to Mexico's Alpek SAB de CV for $385 million.

The sales still falls short of its divestment target of $1.5 billion for the 2015-2016 period and its two-year target of $15.1 billion.

With these sales, Petrobras said it sold $13.6 billion in assets in the 2015-2016 period.

For the 2017 and 2018 period, Petrobras said it is planning to sell $21 billion in assets.

Petrobras had earlier planned to sell $15.1 billion of assets in 2015 and 2016 in order to reduce its $123-billion debt, but has not been able to achieve the target since company employees and unions had opposed the divestment, as well as Brazil's audit court had temporarily suspended its asset sale program.

Rio de Janeiro-based Petrobras is currently the world's third most-indebted non-financial company and has already been rated as junk by the three major credit rating companies.

But the disinvestment drive has picked up momentum after Pedro Parente was appointed chief executive officer in June.

In August, it struck a deal to sell its majority stake in one of its largest oil and gas prospects to Norway's Statoil ASA for $2.5 billion.