Brazilian giant blames court injunction blocking the completion of Karoon deal

Brazil’s state-run oil company Pretrobras will still fall $1.5 billion short of its divestment target for the 2015-2016 period despite announcing the sale of ethanol and petrochemicals assets for $587 million.

Even after a flurry of asset sales this month, Petrobras failed to meet its two-year divestment target of $15.1 billion.

The state oil company said in an emailed statement that a court injunction this month blocking its negotiations to sell the Tartaruga Verde and Bauna oilfields was to blame for missing the goal. The company announced in October Karoon Gas Australia was interested in these fields.

Petrobras said its 2017-2018 asset sale target would be automatically raised to $21 billion to compensate for the shortfall.

Among the latest asset sales announced on Wednesday was its 46% stake in ethanol producer Guarani, which was acquired for $202 million by its French partner Tereos, which will now own all of the company.

Petrobras said it will also sell its two petrochemical units in the north-eastern state of Pernambuco – Petroquimica Suape and Citepe – to Mexican group Alpek SAB de CV subsidiaries Grupo Petrotemex SA de CV and Dak Americas Exterior SL for $385 million.

Petrobras is selling off noncore assets in a bid to reduce its $125 billion debt, the largest in the global oil industry.

Last week, the company said it would sell $2.2 billion worth of assets to France’s Total, including stakes in oilfields and two thermal power stations.

That announcement came a week after Petrobras sold its 49% stake in sugar and ethanol joint venture Nova Fronteira Bioenergia to partner Sao Martinho for $133 million in shares.

Petrobras said the recent deals were exempted from the ruling by Brazil’s audit court on 7 December that temporarily suspended its asset sale programme. These sales were allowed to proceed because they were in advanced stages, the company said.

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