State-controlled Petróleo Brasileiro SA has entered exclusive talks with Brookfield Asset Management Inc (BAMa.TO) over the sale of natural gas pipeline unit Nova Transportadora do Sudeste SA, as part of a plan to dispose of $15 billion of non-essential assets by year-end.
In a Thursday securities filing, Petrobras (PETR4.SA), as Brazil’s state oil producer is known, set an exclusivity period for negotiations initially at 60 days that could be extended for another 30 days. Terms of the transaction were not disclosed.
Reuters reported on Wednesday, citing sources, that Brookfield had offered 18 billion reais ($5.2 billion) to buy NTS, as the unit is known, trumping rival bids. According to the sources, who requested anonymity to speak freely about the deal, other bidders included Spain’s Gas Natural Fenosa SA, France’s Engie SA (ENGIE.PA) and Japan’s Mitsui & Co Ltd (8031.T).
A sale of NTS could give a boost to Petrobras, which is relying on asset sales and cost cuts to reduce a debt burden of $130 billion – the largest of any global oil firm. So far this year, Petrobras has sold $1.4 billion in assets, with ratings company Moody’s Investors Service saying the slow pace of divestitures could hamper debt-reduction efforts.