The race is on to acquire Petrobras’ assets in Petrobras Africa which is valued at $2bn. Two international energy merchants -Glencore and Vitol have disclosed their willingness to offer financial backings to some of the local bidders.
According to Reuters, sources close to the situation confirmed that Glencore and Vitol are putting money in place to support Nigerian firms bidding to purchase the oilfields located in Nigeria. The companies howoever never officially confirmed the story.
Why this is important
Nigerian companies bidding for the deal (such as Seplat) would normally find it difficult to secure the financial requirements on their own. This deal therefore makes the process easier for them.
Why the consortium’s interest?
Glencore and Vitol are hopeful that this deal would guarantee them future access to quality crude oil for years for many years to come. This would then enable them to make profit and offset the loan to banks. According to Reuter’s report, “signing up to long-term financing deals to increase volumes and gain exclusive access is one of the traders’ strategies to compensate for increasingly thin profit margins.”
Petrobras is a Brazilian State-owned oil company which is currently embroiled in a serious debt and corruption crisis. Last year, it announced the sale of 100% of its stakes in Petrobras Africa as part of its efforts to offload $21 billion in 2018.
The company currently owns 50% stakes in Petrobras Africa’s offshore blocks (the Agbami field and Afikpo filed) which are currently being operated by a local Chevron affiliate and Total SA respectively.
Other stakeholders in the company include Grupo BTC Pactual SA, which owns 40% shares, and Helios Investment Partners which owns 10%.They have also indicated interest in selling their stakes.
The result of the bid would be announced in early MAY, 2018.