CNPC to buy Petrobras' Peruvian assets for $2.6 billion
13 November 2013
China National Petroleum Corp (CNPC) and its subsidiary PetroChina Co today struck a deal to buy Petrobras Energia Peru SA from Brazilian state-owned oil giant Petroleo Brasileiro SA (Petrobras) for $2.6 billion, the latest acquisition of energy assets by Chinese state-owned oil firms in Latin America.
Petrobras, the world's 12th largest oil and gas producer, which entered Peru in 1996, fully owns two oil and gas fields in Peru and holds a 46 per cent stake in the third.
These fields currently produce about 16,000 barrels a day or about 800,000 tonnes of oil annually.
Petrobras Energia Peru has exploration assets in three different basins - Maranon, Huallaga and Madre de Dios. The company produces in Block X field located in the district of El Alto, in the Talara basin, northwest region of the country.
Its fully owned Block 58, located in the Department of Cuzco, near Camisea, holds the Urubamba, Picha and Taini wells that have recoverable reserves of 2 trillion cubic feet of natural gas and 113.7 million barrels of condensate.
It also holds a 46.16 per cent stake in Block 57.
The proposed sale is part of Perobras plan to sell non-core assets worth around $14.8 billion in order to fund its massive $236 billion oil exploration and expansion plan spread over five-years, which could allow it to overtake the output of all OPEC members except Saudi Arabia.
It is also the most indebted publicly traded company in Brazil.
It was recently forced to reduce its 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.
The company has now hired Standard Chartered to run an auction for its interests in Nigerian offshore oil fields, a sale that may fetch it up to $5 billion.
Petrobras is also in advance talks to sell stakes in its refineries and other assets in Argentina to local company Oil Combustibles, for $400 million.
It sold 50 per cent of its African operations in June to Brazilian investment banking firm Banco BTG Pactual SA for $1.53 billion and last month agreed to sell oil blocks and pipelines in Colombia to Perenco UK Ltd for $380 million.
CNPC, the most acquisitive Chinese oil company, has conducted a series of purchases this year in order to secure energy security for a rapidly growing economy.
It already owns oil and gas assets in Peru. It fully owns Block 6/7 in the producing Talara Oilfield and has a 45 per cent stake in exploratory Block 1-AB/8, Block 111 and Block 113.
The oil explorer acquired a 20-per cent stake in March in Italian oil and gas major Eni SpA's Mozambique natural gas field for around $4.2 billion and followed it up, three months later, by splurging $1.52 billion to buy Marathon Oil Corp's stake in Angolan offshore oil and gas field.
In July, it paid $5 billion for ConocoPhillips' 8.33-per cent stake in the giant Kashagan oilfield in the Caspian Sea in Kazakhstan.