Petrobras in Libra stake sale talks with Shell, CNOOC, Total and CNPC – exec

28 Sep 16 – Petrobras [NYSE:PBR], Brazil’s troubled state-run oil company, is in talks with Shell [LON:RDSA], CNOOC [NYSE:CEO], Total [EPA:FP] and CNPC, to sell a 10% stake of its giant Libra oil field, Anelise Quintao Lara, Petrobras’ executive manager for acquisitions and divestments told this news service.

Libra is Brazil’s biggest oil field to-date. It is a pre-salt deep-water prospect located in the Santos Basin that was discovered in 2010, with estimated reserves of up to 15bn barrels of oil, according to reports.

Petrobras holds a 40% stake, while Shell and Total hold 20% each, and China’s CNPC and CNOOC each own 10% of the block. The oil field will cost about USD 80bn to develop, according to Total.

Brazilian law requires Petrobras to hold a stake of at least 30% for it to retain operatorship of Libra, therefore the company is looking to dispose of a quarter of its 40% holding, Lara told Mergermarket, on the sidelines of the Society of Petroleum Engineers Annual Technical Conference in Dubai.

Petrobras is hoping that one of Libra’s other stakeholders will increase its share in the oilfield, Lara said

If these discussions fail to yield a buyer, Petrobras will open the process up to bidders, and look for an additional partner to join the Libra consortium, Lara said. There is no set timeline to complete the disposal, she added.

“We need money,” Lara noted.

Several outlets reported in June 2015 that Petrobras was considering selling 10% of its 40% stake in Libra oil field, citing unnamed sources. Last December, however, the company issued a statement saying it was was not considering the sale of interest in Libra. According to previous reports, the sale of a 10% stake in Libra could fetch up to USD 1.5bn.

Petrobras is in the midst of a huge corruption scandal that has seen dozens of politicians arrested, including former President Luiz Inacio Lula da Silva, and most recently former Brazilian Finance Minister Antonio Palocci.

Petrobras is undertaking a USD 15bn divestment programme to help pay down its USD 126bn debt – thought to be the largest in the oil and gas industry.

Total declined to comment. Shell, CNOOC and CNPC did not respond to requests for comment.  

Petrobras has a market capitalisation of USD 53.60bn. 

by Katie McQue in Dubai