10 Jan 2017 – Petrobras [NYSE:PBR], the Brazilian oil major, and BTG Pactual [BVMF:BBTG11] have been holding talks with potential buyers for their Africa-focused joint venture Petrobras Oil & Gas for about 12 months, according to two sources briefed on the situation. However, no marketing effort or sale process has officially been launched.
No external banks have been hired to advise, and the process is being largely coordinated by the banking division of BTG Pactual, the first source said. Interest has been drawn from companies in from China, India and Russia, the source added.
BTG Pactual bought 50% in Petrobras Oil & Gas in 2013 for USD 1.525bn, creating an E&P JV comprising branches in Angola, Benin, Gabon and Namibia, as well as subsidiaries Brasoil Oil Services Company Nigeria, Petroleo Brasileiro Nigeria and Petrobras Tanzania.
Now, the Petrobras Oil & Gas JV is thought to have a total value of about USD 2bn, the source noted.
BTG bought at the wrong time, and was subsequently stung by the weak oil prices, the source said. It knows that if it does not find a buyer now, it will be even more difficult in a year or two, when oil prices are stronger. Petrobras is also desperate to raise money, the source added.
Petrobras is grappling with a corruption scandal that has seen dozens of Brazilian politicians arrested, and former President Luiz Inacio Lula da Silva indicted. Two companies reached bribery-related settlements with the American authorities at the end of last year: Odebrecht, Brazil’s largest construction firm, and Braskem, a petrochemical JV between that firm and Petrobras, reached a USD 3.5bn settlement with the US Justice Department.
The Brazilian oil giant is also 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.
The market cap of the BTG Pactual group is BRL 14.71bn (USD 4.6bn) and that of Petrobras is USD 66.46bn.
BTG and Petrobras did not respond to requests for comment.
by Katie McQue