Petrobras brings in Merrill to help in $5 billion selloff plan-sources
Indebted Brazilian oil company Petrobras (PETR4.SA) has brought in Bank of America Merrill Lynch (BAC.N) to help manage a multi-billion dollar divestment plan and has already contacted major oil companies who might be interested buyers, three sources familiar with the matter said on Wednesday.
Petrobras, whose total debts of some $170 billion make it the third-most indebted non-financial company in the world and the biggest debtor in the oil industry, is exploring the sale of stakes in a series of assets to raise around $5 billion, the sources said.
The company has approached between 10 and 15 oil majors about the disposal plan, which could include operating the assets concerned, the sources said, declining to be named since the matter is private.
Petrobras, which has said it expects to sell $13.7 billion of non-core assets this year and next, did not immediately respond to requests for comment. Merrill Lynch declined to comment.
One of the sources stressed however that decisions were still being taken on which assets were for sale and whether operating rights would be offered, cautioning that no deal was certain.
The divestment plan marks a change for Brazil, whose government has been tightening control over the industry and limiting competition for Petrobras in the country's most productive oil regions.
But falling world oil prices, government-mandated fuel subsidies and a price-fixing, bribery and political kickback scandal have limited revenue, drained cash or raised the cost of capital for the Rio de Janeiro-based company, raising concerns it will be unable to finance its expansion goals.
While Petrobras has said it will not sell stakes in producing fields in Brazil's "subsalt" region, it has, according to industry sources, sought to farm out participation and operating rights.
These would include several high-potential areas where discoveries have been made but no development decisions taken.
Among those up for grabs are the Carcará and Jupiter subsalt projects, located respectively in the BM-S-8 and BM-S-24 blocks in the Santos Basin south of Rio de Janeiro, sources said.
Subsalt areas are those with oil trapped under a layer of mineral salts far beneath the seabed. In Brazil the term also refers to an area known as the Subsalt Polygon, which covers nearly all unleased subsalt and post-salt areas in the Santos and Campos Basins.
Petrobras is also considering a sale of its 30 percent stake in BM-C-33 and 100 percent stake in BM-C-36 in the Campos basin, the sources said.
Industry sources also say Petrobras is touting around the BM-S-50 block, home to the Sagitario prospect and owned 60 percent by Petrobras and 20 percent by a joint venture between Repsol SA REP.SM and China's Sinopec, and the BM-S-51 or "Lebre" prospect, owned 80 percent by Petrobras and 20 percent by Repsol.
Petrobras has already said it is considering selling non-Brazil refining assets, oil production assets in the U.S. Gulf, a stake in domestic pipeline and natural gas distribution systems and its fuel distribution unit Petrobras Distribuidora SA.