Petrobras Is Close to Selling Africa Stake to Vitol
Brazil’s Banco BTG Pactual and the U.K.’s Helios Investment Partners, have decided to keep their share of the business.
(Bloomberg) -- Petroleo Brasileiro SA is close to announcing a sale of its stake in an African oil and gas exploration business to a group of investors led by Vitol Group, people familiar with the matter said.
The state-run oil company’s partners in the African operations, Brazil’s Banco BTG Pactual and the U.K.’s Helios Investment Partners, have decided to keep their share of the business, the people said, asking not to be identified because the discussions are private. The deal will value Petrobras’s stake at about $1.5 billion and may be announced in the next month, they said.
No final decision has been made and discussions may still fall apart, the people said. Representatives for Petrobras, Geneva-based Vitol, BTG and Helios Investment declined to comment.
Petrobras had added the venture to its divestment portfolio in May 2017. The oil company is working to offload $21 billion in assets by the end of the year after its debt rose above $100 billion in 2017. In December, Petrobras agreed to sell a stake in a Brazilian oil field to Norway’s Equinor ASA that’s valued at as much as $2.9 billion. The company’s also planning to exit its 4,500-kilometer (2,800-mile) natural-gas pipeline system for as much as $9 billion, people familiar with the matter said this month.
Petrobras and its two partners had previously considered selling their stakes together, valuing the African oil and gas exploration operations at about $3 billion, people familiar with the matter said last year.
The gain in Brent crude oil prices since the start of the year has given the producer room to cut debt even if the divestment target isn’t met. Petrobras has sold less than a third of its target so far.
BTG entered into the venture with Petrobras in 2013, paying $1.5 billion for a 50 percent stake. Africa-focused investment firm Helios joined BTG in the venture soon after. The African operations came under scrutiny in 2016 after a Brazilian senator said in a plea-bargain deal that BTG underpaid for its 50 percent share, which consultants had valued at $2.7 billion. BTG said its offer was the highest in an auction in which 14 other players were invited to participate.
--With assistance from Sabrina Valle and Felipe Marques.
To contact the reporters on this story: Dinesh Nair in London at dnair5@bloomberg.net;Ruth David in London at rdavid9@bloomberg.net;Javier Blas in London at jblas3@bloomberg.net
To contact the editors responsible for this story: Dinesh Nair at dnair5@bloomberg.net, Amy Thomson, Chitra Somayaji
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