State-controlled Petrobras has entered exclusive talks with Brookfield Asset Management Inc. over the sale of natural gas pipeline unit Nova Transportadora do Sudeste SA (NTS), as part of a plan to dispose of $15 billion of non-essential assets by year-end.
In a May 12 securities filing, Petrobras, set an exclusivity period for negotiations initially at 60 days that could be extended for another 30 days. Terms of the transaction were not disclosed.
Reuters reported on May 11, citing sources, that Brookfield had offered 18 billion Brazilian reais ($5.2 billion) to buy NTS, trumping rival bids. According to the sources, who requested anonymity to speak freely about the deal, other bidders included Spain's Gas Natural Fenosa SA, France's Engie SA and Japan's Mitsui & Co Ltd.
A sale of NTS could give a boost to Petrobras, which is relying on asset sales and cost cuts to reduce a debt burden of $130 billion--the largest of any global oil firm. So far this year, Petrobras has sold $1.4 billion in assets, with ratings company Moody's Investors Service saying the slow pace of divestitures could hamper debt-reduction efforts.
According to the filing, a sale of NTS requires approval by Petrobras management and board, as well as from regulators.
Brookfield's purchase of NTS, with nearly 1,560 miles (2,500 kilometers) of pipelines, could be the country's biggest corporate takeover so far this year, according to Thomson Reuters data.
Non-voting shares of Petrobras closed 4.5% down on May 12 at 9.79 reais. The stock is down 25% this year.
The company posted a net loss of 1.25 billion reais in the first quarter, the third consecutive quarterly loss, after oil prices and production slipped and a weaker currency fanned debt costs.
($1 = 3.4788 Brazilian reais)
Recommended Reading
Marketed: EnCore Permian Holdings 17 Asset Packages
2024-03-05 - EnCore Permian Holdings LP has retained EnergyNet for the sale of 17 asset packages available on EnergyNet's platform.
Marketed: Navigation Powder River Eight Leasehold Lots in Wyoming
2024-04-09 - Navigation Powder River has retained EnergyNet for the sale of eight non-producing federal leasehold lots in Converse and Campbell counties, Wyoming.
Exxon Signals Potential Counter Offer for Hess’ Guyana Assets
2024-03-07 - Exxon Mobil has filed a contract arbitration claim related to Chevron’s proposed purchase of Hess Corp.’s interests in the Stabroek Block offshore Guyana.
US Proposes Second GoM Wind Lease Auction
2024-03-20 - Combined, the four proposed areas for offshore wind have the potential to power about 1.2 million homes if developed, according to the Interior Department.
Marketed: Haynesville Shale 157 Well Package in Louisiana
2024-02-23 - A private seller has retained EnergyNet for the sale of a Haynesville Shale 157 well package opportunity in Bienville, Bossier, Casso, De Soto and Sabine parishes, Louisiana.