In just a matter of weeks, the Brazilian state-owned energy company Petrobras will most likely announce the sale of its stake in Petrobras Africa to Vitol.
Anonymous sources familiar with the situation told Bloomberg that Petrobras’ stake in the company will be valued at some $1.5 billion.
Petrobras’ other venture partners in Petrobras Africa — Uk’s Helios Investment Partners and Brazil’s Banco BTG Pactual — have both chosen not to sell their stakes in the business, the sources said.
Note that all attempts to get representatives of companies to comment on this development failed. In the meantime, this is not a done deal seeing as the possibility of things being called off exists.
Petrobras’ divestment efforts
Back in May 2017, Petrobras decided to divest as much as $21 billion worth of assets. The decision was made following a dramatic increase in the company’s debt to the tune of $100 billion.
So far, Petrobras has reached an agreement to sell a $2.9 billion worth of assets to Equinor AXA, a Norwegian company. The company is also contemplating selling off its natural gas pipeline which is 4,500 kilometres long, and valued at $9 billion.
Petrobras’ stake in Petrobras Africa is also among the list of assets that were scheduled for divestment.
The other two partners in the African operation (i.e., Helios Investment Partners and Banco BTG Pactual) initially mulled selling their stakes as well but changed their minds along the line.
In 2013, Banco BTG paid $1.5 billion for a 50% in Petrobras Africa. Soon afterwards, Helios Investment Partners came onboard. Things were going well until 2016 when a Brazilian lawmaker revealed that Banco BTG actually paid less money for its 50% share.
According to the revelation, private consultants valued the share at $2.7 billion instead of $1.5 billion. Meanwhile, the Brazilian bank insisted that it acquired the stakes through transparent means.
Vitol had long been in the running to acquire Petrobras Africa
As we reported, several companies have been in talks with Petrobras over the possible acquisition of its assets. One of such is the Russian oil company Lukoil, which earlier this year opened preliminary talks with the Brazilians.
We also reported that two leading energy companies (Glencore and Vitol) were also in the race to acquire the assets.
Glencore and Vitol are hopeful that this deal would guarantee them future access to quality crude oil for years for many years to come.
Founded in 1966, Vitol is one of the world’s biggest energy and commodities companies with operations in about forty countries of the world including Nigeria.
I’m curious to see the NIGERIAN content compliance on this transaction. I doubt FG will consent any asset to Vitol with NIGERIAN partners.