Transactions - MARCH 2, 2017

Petrobras sells assets to Total for $2.2b

by Jody Barhanovich

France-based Total has agreed to pay $2.225 billion for a part in Brazil-based oil company Petrobras’ assets. The agreement was officially signed on Dec. 21, 2016.

The investment is made up of $1.675 billion in cash for assets and services, a $400 million credit line, which represents part of Petrobras’ investment in the oil fields in the Iara area, and contingent payments amounting to $150 million.

The contracts includes the transfer of rights of 22.5 percent from Petrobras to Total in the Iara concession area (Sururu, Berbigão and Oeste de Atapu fields), in the BM-S-11 Block.

The agreement also includes a 35 percent transfer of rights from Petrobras to Total, plus the operatorship in the concession area of the Lapa field, in the BM-S-9 Block, of which Petrobras currently controls 10 percent. The Lapa field is in its production phase, and was brought into operation in December 2016. In this consortium, BG E&P Brazil holds 30 percent, and RepsolSinopec Brazil holds 25 percent.

Petrobras will remain the head operator and will still hold the biggest interest in the area at 42.5 percent. Other firms in the consortium include BG E&P Brazil, a Shell subsidiary, which will hold 25 percent, and Petrogal Brazil, which will hold 10 percent.

In addition, Petrobras has sold 50 percent of its interest in Termobahia to Total, including the Rômulo de Almeida and Celso Furtado cogeneration plants in Bahia state. The two plants are connected to the regasification terminal located in São Francisco do Conde, Bahia, where Total is to have access to the regasification capacity for supplying the plants with gas.

In other transactions, Petrobras recently sold its wholly owned subsidiary Liquigas to Ultragaz, a Brazilian company operating in fuel distribution sector, for approximately $850 million. The transaction is aligned with Petrobras’ strategic plan to withdraw entirely from the liquefied petroleum gas distribution and petrochemical business between 2017 and 2021, according to Petrobras.

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