Petrobras Approved the Asset Sale Totaling US$ 2.1 bln

Source: www.gulfoilandgas.com 8/16/2013, Location: South America

Petrobras, in compliance with Brazilian Securities Commission regulation – CVM No. 358/02, announces that its Board of Directors, in a meeting held today, approved the following asset sale transactions totaling US$ 2.1 billion:

1. Alienation of 100% of Petroquimica Innova S.A. (Innova) shares to Videolar S.A. and its majority shareholder for R$ 870 million (approximately US$ 372 million1) including the assumption by the buyers of approximately R$ 23 million in debt.

The transaction will be submitted for vote in an Extraordinary Shareholders Meeting to be convened in due course and, based on the opinion of the Brazilian Securities Commission (Case CVM RJ 2010/13425), will not lead to preemptive rights for the acquisition of Innova shares by Petrobras shareholders.

Innova is a second-generation petrochemical company and is located in the Petrochemical Zone of Triunfo, in the state of Rio Grande do Sul. It produces ethylbenzene, styrene and polystyrene, used in the manufacture of home appliances, disposables, elastomer, packages, paints and fiberglass.

The conclusion of the transaction is subject to certain precedent conditions, including approval by the Brazilian Antitrust Authority - Cade.

2. Alienation of the 35% stake held by Petrobras in block BC-10, known as Parque das Conchas, to the Sinochem Group for US$ 1.54 billion.

Block BC-10 is located in Campos Basin, some 100 km off the southern coast of the state of Espirito Santo, and partners include Shell, operator with a 50% stake and ONGC, with 15%. These partners have preemptive right, which may be exercised within 30 days after notification.

The conclusion of the transaction is subject to certain precedent conditions, including approval by the Brazilian Antitrust Authority – Cade, Brazil’s National Petroleum, Natural Gas and Biofuels Agency – ANP and China’s National Development and Reform Commission – NDRC.

3. Farm-out contracts for US$ 185 million related to the totality of Petrobras’ stake in blocks MC 613 (Coulomb), GB 244 (Cottonwood) and EW 910, all in production and located in the US Gulf of Mexico.

Petrobras has a 33% stake in Coulomb field, while the remaining 67% is held by Shell, which is the operator. This field is located in the Mississippi Canyon Block 613 (MC 613), 130 km off the coast of Louisiana.

Petrobras has a 100% stake in Cottonwood field located in the Garden Banks Block 244 (GB 244), 220 km off the coast of Texas.

Petrobras has a 60% stake in the EW910 asset, and the remaining 40% is held by W&T Offshore, which is the operator.

The transaction is subject to third party preemptive rights and approval by the Bureau of Ocean Energy Management - BOEM.

4. Sales agreement for 20% of the voting capital of Companhia Energetica Potiguar (CEP), with its controlling shareholder, Global Participacoes em Energia S.A, for the total amount of R$ 38 million (approximately US$ 16 million1), to be settled according to the terms of the contract.

CEP is responsible for the implementation, development and exploration of the Potiguar and Potiguar III thermal power plants located in Macaiba, state of Rio Grande do Norte, as well as the sale of eletricity, under the Independent Electricity Producer (PIEE) modality, and electricity transmission. The two diesel-powered power plants have a total installed capacity of 119.5 MW and are in operation since 2009.

The conclusion of the transaction is subject to certain precedent conditions, including approval by the Brazilian Antitrust Authority – Cade. The Brazilian Electricity Agency – ANEEL – will also be notified.

These transactions represent an important step for Petrobras within the scope of its Divestment Program (Prodesin) outlined in the 2013-2017 Business and Management Plan.

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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 


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