Gulf Oil and Gas accountACCOUNT

Petrobras Plans to Leave Peru

Source: Reuters 6/7/2013, Location: South America

Brazil's Petrobras plans to leave Peru, six high-level sources inside and outside of the company said, as the overextended state-run firm sheds assets abroad to focus on its domestic market.

The sources did not say how much the Peruvian assets, which basically consists of two natural gas blocks, could be worth. Globally, the company reportedly expects to generate about $9 billion from an asset sale program being carried out to help fund the development of enormous offshore reserves in Brazil.

Petroleo Brasileiro SA, as Petrobras is known, has already shopped some of its Peruvian assets to potential buyers, according to three of the sources.

A final decision to pull out of Peru has not yet been made and could take some months, according to two other sources - one from the company's Peruvian unit and another from the local oil industry.

A sixth source, from Peru's government, said any departure would be unrelated to the country's regulatory landscape and instead be driven by financial stresses specific to Petrobras.

The company declined to comment on its Peru business.

"Petrobras does not discuss specific asset sale plans and in the case of a sale would only make the sale public when its complete," a company official in Brazil said.

Two of the sources, both executives in Peru's oil industry, said it would be a total withdrawal.

"Petrobras is leaving the country entirely," one of the sources said.

Another source said Petrobras was selling its valuable assets next to the Camisea natural gas fields.

"Petrobras is selling its 46-percent stake in lot 57 that it shares with Repsol and its lot 58," the source said. "But things for lot 58 are delayed because it first needs to finish drilling to find more proven reserves, which would bring in more value."

Each gas lot in Peru has proven reserves of 2 trillion cubic feet for a combined 4 tcf.

But last year, Pedro Grijalba, who at the time was the head of Petrobras Peru, said the company thought lots 57 and 58 could hold 8-10 tcf.

The company's other main asset in Peru, an oil exploration block, was relatively tiny and would not generate much cash, the sources said.


If it left Peru, Petrobras would become the third foreign oil company to leave the Andean country over the last year.

ConocoPhillips walked away from two exploration blocks in Peru in October of last year as part of the U.S. oil company's strategic plan to reduce non-core overseas assets.

A month before that, Canada's Talisman Energy Inc gave up on its eight-year-long effort to produce oil in Peru, as it shed assets in a bid to boost its share price.

A withdrawal by Petrobras could hobble efforts by President Ollanta Humala to make Peru self-sufficient in energy.

But some companies have snapped up Peruvian assets. Royal Dutch/Shell in February bought a bundle of liquefied natural gas assets from Spain's Repsol for $6.7 billion. The deal included operations in Peru, Trinidad and Tobago, and the Bay of Biscay.

According to previous reporting by Reuters, Petrobras is trying to sell oil fields, exploration rights, refineries and other assets in Argentina, Africa, Japan and the United States in an effort to raise cash to help finance a $237 billion, five-year investment plan - the world's largest corporate spending program.

The plan aims to boost Petrobras' output to more than 5 million barrels a day by 2020, making it one of the world's largest producers.

Acquisitions and Divestitures News in Peru >>

South Africa >>  7/5/2020 - Sasol Ltd has opted to give up its licence to explore for gas off the Mozambique coast. Sasol will return Block 16/19 in its entirety to the Governmen...
Canada >>  7/2/2020 - Advantage Oil & Gas Ltd. has successfully closed the previously announced sale of a 12.5% interest in the Glacier Gas Plant to Topaz Energy Corp. ("To...

Nigeria >>  7/2/2020 - Sasol and Chevron have signed an agreement that will result in Sasol selling its indirect beneficial interest in the Escravos GTL (EGTL) plant in Nige...
United Kingdom >>  7/2/2020 - Premier is pleased to announce that the Group’s creditors have approved the acquisition of the Andrew Area and Shearwater assets (together, the “BP ac...

United States >>  7/2/2020 - Mosman Oil and Gas Limited has undertaken a placing to raise £400,000 (before expenses) by the issue of 500,000,000 new ordinary shares (the "Placing ...
Cameroon >>  7/1/2020 - Tower Resources plc, the AIM listed oil and gas company with its focus on Africa, announces a further extension of its Loan Facility ("Facility") of ...

Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Peru Oil & Gas 1 >>  2 |

More News

Related Links

Gulf Oil and Gas
Copyright © 2020 Universal Solutions All rights reserved. - Terms of Service - Privacy Policy.