MOSCOW (MRC) -- Petroleo Brasileiro SA PBR, one of the largest integrated energy firms in Latin America, announced that it has extended discussions for a month with Pampa Energia regarding the sale of its 67.2% stake in subsidiary, Petrobras Argentina, said Finance.
Per Reuters, Pampa Energia – the largest electricity company in Argentina – had offered about USD1.2 billion to purchase the stake in Petrobras Argentina last month. Petrobras’ board of directors had approved the deal with Pampa Energia for a period of 30 days with an option to extend the discussion for another 30 days, if required. It is this extension option that the company exercised this week.
Crude oil price has nosedived from the $100 per barrel mark and has kept sliding since Jun 2014 to the current trading level of around USD39 per barrel. The negative impact of oil price slump and changes in management because of the Brazilian energy behemoth’s corruption scandal, have resulted in the company’s dwindling operating cash flows and return on equity. It has also exposed the company to high debt-management risk.
Petrobras sees selling its stake in the Argentine subsidiary as a means to improve finances and to meet debt obligations of about USD130 billion. The deal, if completed, will be one of the first major deals in Petrobras' eight-month old plan to sell assets worth USD15.1 billion by the end of this year.
As MRC informed earlier, Petrobras is seeking to sell its 5.8 billion Brazilian real (USD1.4 billion) stake in petrochemical producer Braskem SA. Petroleo Brasileiro SA (Petrobras) has hired Brazilian bank Banco Bradesco SA as a financial adviser and has started to pitch the sale to foreign investors. Petrobras owns a 36 percent stake in Braskem, Latin America's largest petrochemical producer. The sale would help Petrobras meet its target of selling USD15.1 billion worth of assets in 2015-16, a key part of its plan to cut debt as oil prices plunge to 12-year lows.
Headquartered in Rio de Janeiro, Petrobras boasts healthy production growth and has announced several important discoveries, of late. Petrobras Argentina owns assets that include a refinery, gasoline stations, drilling rights for several oil and gas fields and stakes in electricity companies.
Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
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