Abu Dhabi – Brazil’s state-run oil company Petrobras is looking for buyers for its refineries and partners to bid in tenders in the Gulf, its Institutional Relations executive director Roberto Ardenghy said (pictured, 3rd, left to right). Ardenghy spoke at Brazil-UAE business seminar this Sunday (27) in Abu Dhabi, UAE, in the sidelines of president Jair Bolsonaro’s visit to the country. “We’re here to showcase our assets [on sale] and partnership opportunities,” he told ANBA.
He explained that Petrobras is seeking partners to form consortiums with and join upcoming oil and gas bidding rounds in Brazil. November 6 will see “the biggest round yet” for previously untendered pre-salt area assets, with four “massive” fields on offer. “And Petrobras is already active there, so the risk is lower,” Ardenghy said.
The 6th pre-salt bidding round for production-sharing contracts will be held the following day, November 7, by Brazil’s National Agency for Petroleum, Natural Gas and Biofuels (ANP). “These are two available options for joint investment with Petrobras,” the executive said.
So far, 14 companies have registered to bid in the November 6 tender, and 17 in the November 7 one. Ardenghy confirmed that consortium talks are ongoing with Gulf companies and said Petrobras is seeking out funds to tap into the pre-salt, which he dubbed the “biggest mineral reserve in the world” right now.
“There are [pre-salt] wells putting out 58,000 barrels per day. These output levels are second only to the Middle East. Average well output is 17,000 bpd,” he said.
During the seminar, Bolsonaro and Chief of Staff Onyx Lorenzoni mentioned the November 6 pre-salt auction and called on UAE investors to join. “In a few days we’ll have one of the biggest pre-salt auctions in our country, and we’re inviting everyone to participate,” the president declared. Lorenzoni called the tender “the biggest oil and gas auction in the West.”
The Middle East’s Qatar Petroleum has already won four exploration and production tenders in Brazil, in partnership with other industry players.
Refineries
Ardenghy also said Petrobras is looking for industry players in the region to purchase its refineries. “There’s a lot of interest in refining here,” he asserted. According to him, Petrobras, which handles 98% of refining activities in Brazil, is looking to sell half its assets. Refineries are on sale in Rio Grande do Sul, Paraná, Minas Gerais, Bahia, Rio Grande do Norte, Ceará, and Amazonas.
The director explained that the plan is to allow 100% ownership of assets and the associated inbound/outbound logistics. These assets are worth “dozens of billions of dollars.” “We have been getting non-binding offers. There’s a lot of interest here,” he said. Investors elsewhere in the Gulf are also interested. “The industry is interested, and I am here to emphasize it even further. They have a lot of experience in refining,” Ardenghy said, adding that, being the world’s fifth biggest refining market, Brazil is an attractive country.
Debt
The executive went on to say that at USD 86 billion, Petrobras has a high debt profile, and that besides bringing that debt down, it needs to gather up resources to invest in exploration and production. To this end, Petrobras is on an “aggressive asset sale-based cost-cutting and divestment drive.” The company has raised USD 13.3 billion via “divestments” to date this year, and expects to see USD 15 billion by the end of 2019.
Translated by Gabriel Pomerancblum
