Petrobras Divestment Plans Gains Momentum - Report on Petroleo Brasileiro S.A. - Petrobras

Jul 24, 2015, 09:35 ET from

NEW YORK, July 24, 2015 /PRNewswire/ --

ACI Association has initiated research coverage on Petroleo Brasileiro S.A. - Petrobras (NYSE: PBR). Select highlights from the internally released reports are being made available to the general public (included below), with access to the entirety of the research available to new members.

Today, membership is open to readers on a complementary basis at the following URL:

Highlights from our PBR Report include:

  • Divestment plans being formalized - A Zacks report dated July 06, 2015 informed that Petroleo Brasileiro S.A. or Petrobras has announced its intention to divest assets worth $15 billion in 2015-16 in its latest 5-year plan. The Brazilian state-run energy firm's divestment plan is segmented into three parts - 30% from E&P, 30% from Downstream and the remaining 40% from Gas & Power. The report also highlighted that Petrobras has requested certain companies, having experience into offshore exploration and production industry, to place bids for stakes in some concessions. The assets that are up for bidding include the Company's pre-salt blocks.
  • Expected Divestment Proceeds to rise over $5 billion - Citing Bloomberg, the report mentioned that China Petroleum & Chemical Corp. or Sinopec and Cnooc Ltd have expressed interest to buy stakes in the Company's offshore exploration blocks. The report added that Royal Dutch Shell and Statoil ASA are among other interested parties, preparing bids for the pre-salt blocks sale. The Company is expecting to raise over $5 billion from the divestment of these offshore blocks. According to Zacks report, Petrobras is also selling its stakes in the Sagitario, Jupiter and Pao de Acucar deep-water discoveries.
  • PetroRio acquires Petrobras's stake in BJSA Oilfields - In another Zacks report dated July 03, 2015 it was highlighted that Petroleo Brasileiro S.A. or Petrobras has entered into an agreement with PetroRio S.A to divest its 20% of the rights and obligations of the concession contracts for the Bijupirá and Salema ("BJSA") oil and gas fields, located at water depth of 480-850 meter in the Campos Basin. The total transaction price is $25 million, subject to adjustments, payable in cash. PetroRio will be paying 20% of the amount through its own funds and 80% will be funded through structured finance facilities. This transaction includes the 20% stake held by Petrobras in the BJSA Fields and equipment related to their operation.
  • Production output of BJSA Fields - On July 1, 2015, Petro Rio S.A. reported that the concessions cover an area of 40,000,000 m2, with an average production of 22,000 barrels of oil per day and 325,000 cubic meters of associated gas output, which are equivalent to 24,000 boe/day. The oil extracted from the fields is light oil between 28 to 31 API. The BJSA Fields are in proximity of just 80km northeast of the Polvo Field, PetroRio's production asset, thereby providing important synergy gains to PetroRio's operations.

To find out how this influences our rating on Petroleo Brasileiro S.A. - Petrobras, read the full report in its entirely here:

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