‘Petrobras to launch $5b Nigerian sale’Comment on this story
Hong Kong/Abuja - Brazil's state oil company Petrobras has launched an auction to sell its interest in Nigerian oil fields, in a sale that may fetch up to $5 billion, as the company seeks to raise cash and embarks on a capital spending plan, people close to the matter told Reuters.
The company, formally known as Petroleo Brasileiro SA, has hired Standard Chartered to run the process, which will kick off in the next two months, the people said. Asian state oil companies are expected to participate in the auction, hoping to add more production assets to their portfolios.
Standard Chartered and Petrobras declined comment.
Petrobras holds a stake of 8 percent in the offshore Agbami blocks, which are operated by United States energy major Chevron and a 20 percent share of the offshore Akpo project, operated by French oil firm 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 of the Niger Delta, according to its website.
Petrobras is divesting assets and redirecting investment towards higher-return activities such as exploration and production to finance a five-year, $236.7-billion capital spending plan that is the world's largest corporate investment program.
Chief Executive Officer Maria das Graças Foster set a goal for asset sales of $9.9 billion this year, which she hopes can free up cash, avert the sale of new shares, reduce debt and protect the company's investment-grade ratings.
The plan should help Petrobras more than double current production by the start of next decade, to about 5.2 million barrels of oil and natural gas equivalent a day, and help Brazil become self-sufficient in refined products as well as crude oil.
By divesting assets such as the Nigeria blocks, Petrobras could focus more on exploring for oil in a vast deep sea region off the coast of Brazil known as the subsalt and thought to contain dozens of billions of barrels of high-quality oil.
In its previous five-year plan, announced last year, Petrobras had hoped to sell about $15 billion of assets to help finance capital spending. But as it rushed to sell assets, the company found potential buyers reluctant to pay top dollar for projects such as its oil leases in the Gulf of Mexico. - Reuters