Petrobras to sell 50% of African operations to Banco BTG Pactual for $1.53 bn

PetrobrasState-run energy giant Petroleo Brasileiro SA (Petrobras) yesterday agreed to sell 50 per cent of its African operations to Brazilian investment banking firm Banco BTG Pactual SA for $1.53 billion.

Its first investment in the oil and gas sector, BTG Pactual and Petrobras International Braspetro B.V. (PIBBV), a subsidiary of Petrobras, will form an equal joint venture to explore and produce oil and gas in Africa.

Under the JV, PIBBV will buy 50 per cent of PIBBV, which has operations in Nigeria and Tanzania, offices in Angola, Benin, Gabon and Namibia, as well as the Brasoil Oil Services Company (Nigeria), Petroleo Brasileiro Nigeria, and Petrobras Tanzania Ltd subsidiaries, for $1.53 billion.

The sale is part of the Rio de Janeiro-based company's plan to sell non-core assets worth around $14.8 billion in order to fund its massive $236 billion five-year oil exploration and expansion plan, which may allow it to overtake the output of all OPEC members except Saudi Arabia.

The company was recently forced to reduce asset sale target to $9.9 billion after it failed to get good offers for its Gulf of Mexico assets, where it was expecting around $4 billion.

Petrobras has hired Standard Chartered to run an auction for its interests in Nigerian offshore oil fields, a sale that may fetch the Brazilian oil giant up to $5 billion.

It is now in advance talks to sell stakes in its refineries and other assets in Argentina to local company Oil Combustibles, for $400 million.

Petrobras, the world's 12th largest oil and gas producer, operates in 28 countries across five continents, with over 100 production platforms, 16 refineries, 30,000 kms of pipelines and more than 6,000 service stations.

Its has proven reserves of around 14 billion barrels of oil, a figure that could nearly be doubled with the Tupi and Iara finds, thereby slowly moving towards recovering the unofficial estimated oil reserves contained in the subsalt band.

Analysts say that up to $600 billion worth of investment in research, logistics and technology are required to extract the oil below a thick layer of salt at depths of up to 7,000 meters (23,965 feet) under Brazil's Atlantic waters.