Petrobras to Auction $5 Billion of Nigeria Oil Assets

Source: Reuters 3/27/2013, Location: Africa

Brazilian oil company Petrobras is to auction off its stakes in Nigerian oil fields to raise cash for domestic projects, a deal that may fetch up to $5 billion (3.3 billion pounds), sources close to the deal said.

The state-controlled company, formally known as Petroleo Brasileiro SA, has hired Standard Chartered to run the process, which will kick off in the next two months, banking and oil industry sources said.

Asian state oil companies are expected to bid in the hopes of adding more production assets to their portfolios. Private equity funds are also interested, banking sources said.

Standard Chartered and Petrobras declined comment.

The decision to sell the Nigeria assets marks a retreat away from foreign markets once considered strategic in favour of realising the government's goal for Brazil to become self-sufficient in energy.

Petrobras will sell its 8 percent stake in the Nigerian offshore Agbami blocks, which are operated by U.S. energy major Chevron and its 20 percent share of the offshore Akpo project, operated by France's Total.

Crude oil production from the Agbami field fields began in 2008. Output from the project can reach 250,000 barrels per day (bpd), and it holds estimated reserves of 900 million barrels.

Akpo began production in 2009 and has plateau output of 175,000 bpd of light condensate oil and 9 million cubic metres of gas. It has proved and probable reserves of 620 million barrels of condensate and more than 28 billion cubic metres of gas, according to Total.

Petrobras began operations in Nigeria in 1998 in the deep waters off the coast of the Niger Delta.

Asset Sales
Petrobras is divesting assets and redirecting investment towards higher-return activities such as exploration and production to finance a five-year, $237 billion capital spending plan, the world's largest corporate investment program.

Petrobras hopes to more than double current oil and gas production by the start of the next decade to about 5.2 million barrels of oil equivalent a day and also help Brazil become self-sufficient in refined products as well.

By divesting assets such as the Nigerian blocks, Petrobras can focus more on exploring for oil in a vast deep sea region off the coast of Brazil known as the subsalt, thought to contain dozens of billions of barrels of high-quality oil.

Cash flow has been crimped by falling output and the government's refusal, on anti-inflation grounds, to let Brazilian gasoline and diesel prices rise in line with world prices. This has forced Petrobras to subsidise consumers even as its debt rises above its internal limits.

Selling assets has not been easy, however, as potential buyers have sensed its need for cash and made low bids.

The company recently cut its asset sale goal to $9.9 billion from nearly $15 billion after it failed to get attractive offers for energy assets in the Gulf of Mexico.

ConocoPhillips (COP.N), meanwhile, is selling its Nigerian businesses to Oando Energy (OER.TO) for around $1.79 billion so it can focus on increasing its lower-cost U.S. shale oil and natural gas projects.

For more information about related Opportunities and Key Players visit West Africa Projects

Brazil >>  5/13/2022 - Petrobras, following up on the release disclosed on 07/20/2018, informs that it has decided to conclude the current competitive process, which was in ...
Russia >>  5/12/2022 - Shell Overseas Investments B.V. and B.V. Dordtsche Petroleum Maatschappij subsidiaries of Shell plc have signed an agreement to sell Shell Neft LL...

United Kingdom >>  5/12/2022 - JERA Americas, the Houston-based subsidiary of global energy leader JERA, has entered into an agreement to acquire a 1,633 megawatt (MW) thermal power...
Australia >>  5/11/2022 - NeuRizer - (formerly Leigh Creek Energy) wholly owned subsidiary Leigh Creek Oil and Gas (LCOG) has announced that Santos will farm-in and take operat...

Brazil >>  5/10/2022 - Petro Rio has entered into an agreement with Aquadrill that gives PRIO the opportunity to acquire the Capricorn semi-submersible rig.

The s...

Brazil >>  5/10/2022 - Petrobras, following up on the release disclosed on July 1 2020, has started the binding phase regarding the sale of its total participation in the T...

Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Gulf Oil and Gas
Copyright 2021 Universal Solutions All rights reserved. - Terms of Service - Privacy Policy.