Petrobras will maintain operations in Argentina and cancel privatizations

Petrobras announced that it will no longer dispose of assets considered strategic, ending the sale of exploration and production structures in addition to the subsidiary in Argentina. The company, however, will continue to sell stakes in three thermoelectric plants. These decisions are part of a review of the asset sale process that had not yet reached the contract signing phase, as announced this week.

Petrobras’ divestment plan, started in 2015 to reduce its debt, expected to raise between US$ 15 billion and US$ 25 billion from the sale of assets during the government of former President Jair Bolsonaro (PL). However, Luiz Inácio Lula da Silva (PT) suspended and reviewed all sales processes, keeping only those with signed contracts in progress.

The state-owned company confirmed the cancellation of the sale of the Urucu and Bahia Terra poles, the Manati field and Petrobras Operaciones, a subsidiary in Argentina. At the same time, it will maintain the sale of a 20% stake in the thermoelectric fuel oil Termocabo and Suape II, in Pernambuco, and 18.8% in the gas thermoelectric Araucária, in partnership with Copel.

The continuity of operations in Argentina occurs at a time when Lula plans to help the weakened economy of the neighboring country with a line of financing for exports of US$ 600 million for the food and auto parts sectors, in addition to R$ 4.5 billion from the National Bank for Economic and Social Development (BNDES) for the construction of various structures, such as the second section of the Néstor Kirchner gas pipeline and two bridges between the two countries.

The operation in Argentina was even suspended with the sale of 67.2% of the shares in July 2016 to Pampa Energía. However, it bought back part of the capital in three months, including 33.6% of the unconventional gas field in the province of Neuquén and 100% of the gas field in Bolivia, according to information from the Economic value.

“As for the other assets, their permanence in the portfolio will be periodically reassessed based on updated assumptions of profitability, strategic adherence, decarbonization opportunities and the stage of their productive life. Those whose divestment is approved by the board will be communicated to the market in due course”, said the state-owned company in a statement (see in full).

The Urucu Pole, located in Amazonas, is the largest onshore oil and gas reserve in Brazil, but the sale negotiations were ended due to the lack of agreement between the parties. Petrobras also withdrew from the sale of its stake in the Manati natural gas field, in Bahia, and had previously informed that it would not proceed with the sale of Polo Bahia Terra.

Petroreconcavo, which was negotiating the purchase of Polo Bahia Terra, said that negotiations were paralyzed after a notification from the Ministry of Mines and Energy.

The sale of Petrobras’ stake in Brasympe, owner of Termocabo thermal, and Suape Energia, owner of Suape II thermal, will continue. In addition, the company from Paraná, Copel, is also putting its stake in the Araucária gas thermal plant up for sale as part of the decarbonization process.