Brazil's Petrobras agreed to sell 90% of its natural gas pipeline unit to a group of investors led by Canada's Brookfield Asset Management Inc. for $5.2 billion, a source with direct knowledge of the deal said on Sept. 6.
The investor group includes British Columbia's pension fund and Chinese and Singapore sovereign wealth funds CIC and GIC. The preliminary agreement will be submitted to the companies' boards and the transaction is expected to close in late September, the source said.
Petrobras declined to comment on the matter and Brookfield also declined to comment.
The deal will be the largest divestment so far in the heavily indebted oil company's asset sale plan. So far this year, Petrobras has sold $1.4 billion in assets out of a total $15.1 billion target for divestments expected by the end of next year. The sale should give a boost to downsizing efforts at Petrobras that hinge on divestments to cut the roughly-$130 billion debt burden, which is the largest of any international oil firm.
Reuters reported on May 11 that Brookfield had entered exclusive talks to acquire Nova Transportadora do Sudeste SA, or NTS, as the Petrobras subsidiary is informally known. The exclusivity period expired on Aug. 12.
NTS has nearly 1,560 miles (2,511 kilometers) of pipelines in southeast Brazil.
The talks took longer than expected because the parties and their financial and legal advisers had to agree on terms of new contracts establishing the commercial relationship between Petrobras and NTS, according to the first source and two other people with direct knowledge of the matter. All three asked not to be identified because they are not authorized to discuss the matter publicly.
During the exclusive talks, the investor group led by Brookfield raised the stake it was offering to acquire in NTS to 90% from 82%.
The investment banking unit of Banco Santander Brasil SA advised Petrobras on the deal.
Recommended Reading
Neptune Energy’s Rӧmerberg 6 Well Begins Production
2023-01-09 - Rӧmerberg 6 is predicted to increase Neptune’s production in Germany’s Rhine Valley to approximately 3,700 boe/d.
Norway Awards Nearly Four Dozen Offshore Permits
2023-01-10 - Equinor scooped up more than half the licenses awarded.
Koil Energy’s Full Plate
2023-02-17 - Koil Energy, formerly known as Deep Down, has rebranded as a full subsea systems provider and is providing multi quick connector plates for Beacon Offshore Energy’s Shenandoah project.
TotalEnergies Gives Lapa South-West the Green Light
2023-01-17 - The subsea tieback offshore Brazil is expected to go onstream in 2025, producing to the Lapa FPSO, which has produced the field since 2016.
Emerging Players Contribute to 'New Day' for Oil Activity in West Africa
2023-01-12 - New players in Mauritania and Ivory Coast are making their presence felt in the energy industry.