A partnership led by Vitol Group agreed to buy a 50% stake in an African oil and natural gas exploration business from Petroleo Brasileiro SA for $1.5bn. Bloomberg
INTERNATIONAL - A partnership led by Vitol Group agreed to buy a 50 percent stake in an African oil and natural gas exploration business from Petroleo Brasileiro SA for $1.5 billion (R21.9bn), helping the Brazilian company toward its goal of $21 billion in asset sales this year.

The deal includes an upfront payment of $1.41 billion and additional payment of up to $123 million to be paid when the Agbami field in Nigeria is reassigned to the new owners, Petrobras and Vitol said in separate statements. The size of the transaction makes it a material divestment for Petrobras, and the resulting drop in leverage could encourage stock and bondholders.

The transaction came together three days after Jair Bolsonaro won Brazil’s presidential election on a pro-privatization platform, and defeated a left-wing candidate who had criticized Petrobras’s asset disposal program.

While the sale will help Petrobras slash its enormous debt burden, the largest of any publicly traded oil company, it will also remove 21,000 barrels a day of its international production, the state-controlled producer said. Petrobras’s output has remained steady in recent years, partly because it has sold off producing assets in Brazil.

The deal marks a continuation of Petrobras’ plan to shed assets outside Brazil to focus on the pre-salt region in the country’s deep waters, which is considered more profitable than other offshore regions and where output is surging, compensating for declines at the company’s legacy fields.

Vitol’s partners in the transaction are Africa Oil. and Delonex Energy, Pactual E&P will continue to own a 50 percent stake in the enterprise.

“Vitol has a long history of investing in Nigeria’s energy sector. We are pleased and proud to add this significant upstream asset to our infrastructure and downstream Nigerian investments,” Chief Executive Officer Russell Hardy said in a statement.

BLOOMBERG