Petroleo Brasileiro Petrobras SA (NYSE:PBR) to sell its columbia stake
Petroleo Brasileiro Petrobras SA (NYSE:PBR) has been financially unstable for quite some time now. It is now seeking to up its performance by disposing of various non-core assets. It has now reached an agreement with the Prerenco UK Ltd, to sell 100 % of the shares that have been issued by Petrobras Colombia Limited, in a transaction that is said to be in the range of $380M.
This is inclusive of 11 onshore-exploration and production-blocks that have an average-production of 6,530 BOE. The Alto Magdalena and Colombia oil-pipelines complete this deal and have a total carrying-capacity of 9,180 BOE and 14,950 BOE respectively.
Good use of cash
The proceeds of this deal will be allocated for finance development of the company’s
Pre-salt oil reserves that are located below Brazil’s seabed. This divestiture is a segment of Petroleo Brasileiro Petrobras SA (NYSE:PBR) announced Petrobras Divestment Program. This is a restructuring-plan that is part of the larger Business and Management Plan which is expected to conclude in 2017.
Last month, the company has sold a 50% stake of its African assets to the Grupo BTG Patcual. This sale was also part of this plan and it added $1.5B in cash to its coffers. The company is in need of funds to carry-out its current aggressive-exploration strategy.
This deal is pending approval from the National Hydrocarbons Agency in Colombia. However, the company does not really expect any surprises and the approval should be granted by the end of 2013. By no means does this deal indicate the end of the company’s presence in Columbia.
It will still be operating its offshore exploratory-blocks, which are a key part of its distribution business. Petroleo Brasileiro Petrobras SA (NYSE:PBR) is also moving forth with the single block onshore exploratory-operation.
In the pipeline are more sales in Peru and Columbia.