Ex-Galp CEO Said Leading Bidder on $1.6 Billion Petrobras Fields

(Bloomberg) -- The oil startup of Galp Energia SGPS SA’s former chief executive officer is leading the race for three offshore fields that Petroleo Brasileiro SA has put up for sale, people familiar with the operation said.

The new explorer, PetroAtlantic, placed higher bids in February than more established competitors Karoon Gas Australia Ltd., PetroRio SA and Russian billionaire Mikhail Fridman’s LetterOne Holdings SA for the Bauna, Golfinho and Tartaruga fields, the people said. PetroAtlantic, which still doesn’t have a corporate website and wasn’t registered as an operator with Brazil’s oil regulator as of Thursday, was the only company that put an initial bid of more than $1.6 billion for all three properties, one of the people said. The startup is still seeking funding for the deal, according to the people.

Petrobras is selling fields, pipelines and subsidiaries to curb the biggest debt in the industry. The state-run giant has so far raised about $4.6 billion from deals in Argentina, Chile and Brazil, less than a third of its $15.1 billion target for 2015 and 2016. The July sale of the Carcara offshore field to Statoil ASA for $2.5 billion was one of the largest ever by the Brazilian producer.

The competitive process for the three fields is ongoing, and it isn’t appropriate to make any comments at this stage, Manuel F. De Oliveira, the head of PetroAtlantic who was CEO of Portugal’s Galp until last year, said in an e-mailed response to questions. Petrobras didn’t immediately respond to a request for comment. Karoon declined to comment.

Karoon, based in Mt. Martha, Australia, had initially only bid for the Bauna field but has since presented a counter offer that includes all three properties, the people said. PetroRio, based in Rio de Janeiro, has only shown interest in Bauna, offering about $500 million for the field in February, the people said. Bauna was the 12th-largest producing field in Brazil, according the local oil regulator data from July.

To contact the reporters on this story: Sabrina Valle in Rio de Janeiro at svalle@bloomberg.net, Peter Millard in Rio de Janeiro at pmillard1@bloomberg.net. To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Carlos Caminada, Jim Efstathiou Jr.