A&D Opportunities

Petrobras Announces Further Asset Sales in the Espírito Santo and Potiguar Basins

By Kunal Raj
August 26, 2020
2 minutes read
Alto do Rodrigues Onshore

Brazilian national oil company Petroleo Brasileiro SA (Petrobras) has commenced sale processes this week for divesting its entire 100% stake in five producing fields in the Espírito Santo basin, jointly designated as the North Capixaba cluster, as well as a package of twenty six additional fields in the Potiguar basin.

The North Capixaba cluster is comprised of the Canca, Canca Leste, Fazenda Alegre, Fazenda Sao Rafael, and Fazenda Santa Luzia fields located in Espírito Santo State. The cluster also includes the North Capixaba terminal and all the production facilities contained in the ring fence of the concessions, besides the ownership of some lands. Average daily production from the cluster during H1-2020 was approximately 7,388 barrels of oil equivalent per day (boe/d), of which approximately 94% is oil. Petrobras currently holds 100% operated interest in the fields.

“This transaction is in line with the portfolio optimization strategy and the improvement of the company’s capital allocation, increasingly concentrating its resources in deep and ultra-deep waters, where Petrobras has demonstrated great competitive edge over the years,” the company said in a press release announcing the start of the sale process for the North Capixaba cluster.

Petrobras is also divesting concessions located both onshore and offshore in Rio Grande do Norte State, jointly referred to as the “Potiguar cluster,” as well as its 100% stake in in the Clara Camarão Refinery located in Guamaré. The Potiguar cluster includes three sub-clusters, namely Canto do Amaro, Alto do Rodrigues, and Ubarana. Average daily production from the entire cluster during H1-2020 was approximately 23,730 barrels of oil equivalent per day (boe/d), of which approximately 97% was oil. The cluster includes access to infrastructure for the processing, refining, logistics infrastructure, storage, transport and flow of oil and natural gas.

State-owned Petrobras has announced several asset sales in recent years as part of a privatization plan that commenced in 2015, following several corruption scandals that involved allegations against several company officials for paying bribes and accepting kickbacks in exchange for awarding contracts. The company has also been adversely affected by depressed domestic demand in Brazil due to a high number of Covid-19 cases. Brazil currently has the second-highest number of infections in the world.

The opportunity teasers for both divestitures, which contain information about the opportunities as well as the eligibility criteria for the selection of potential participants in the sale process are available on the Petrobras website. Expressions of interest are due to be submitted by September 10th,2020 for the Potiguar cluster, and by September 11th, 2020 for the North Capixaba cluster.

JP Morgan is acting as the exclusive financial advisor to Petrobras for both sales processes.

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