Rio de Janeiro, May 8, 2018 – Petróleo Brasileiro S.A. – Petrobras reports that it received the Official Letter No. 189/2018/CVM/SEP/GEA-1, which requests the following clarification:
Official Letter No 189/2018/CVM/SEP/GEA-1
1. We refer to the news published on 05.05.2018 in the newspaper “O Estado de São Paulo,” Business section, entitled “Engie becomes the single competitor for pipeline”, which includes the following statements:
The French company Engie was chosen by Petrobras as unique party in the negotiations for the purchase of 90% of the gas pipeline Transportadora Associada de Gás (TAG). Both companies shall reach an agreement on the conditions for the $ 8 billion transaction by May 31. Otherwise, other interested parties will return to the bidding for the opportunity to submit new proposals, sources say.
2. In this regard, we request that the company represents as to the truth of the news and the reasons, if any, for not considering such news a material fact, as well as comment on other information considered relevant on the matter.”
Firstly, it should be noted that the TAG divestment process is a bidding process, following the Petrobras System Divestment Scheme (Scheme), in line with the guidelines of the Federal Audit Court (TCU), and complies with the procedures set forth in Decree 9188/17, issued on 11.01.2017, which provides the special divestment regime of federal mixed-capital companies (Decree).
According to the rules contained in such documents, market disclosures must occur at the beginning of each stage of the divestment processes, namely: disclosure of the opportunity (teaser), beginning of the non-binding phase, beginning of the binding phase, execution of agreements, and in the closing of the transaction. The Scheme also sets forth the mandatory disclosure to the market if an exclusivity agreement is established and duly approved by the Company’s Executive Board.
In this sense, announcements to the market were disclosed on 09.05.2017, 10.23.2017 and 12.28.2017, related to the divestment involving TAG, respectively reporting on the disclosure of the opportunity (teaser), the beginning of the non-binding phase and the binding phase.
Engie Brasil Participações Ltda. (Engie) submitted the best proposal in the binding phase of the divestment process and, therefore, was invited to participate in the agreement negotiation phase, but no exclusivity agreement was established in the meantime. The beginning of the negotiations with the bidding winner, under the terms of the Scheme and the Decree, is an expected development in divestment projects, for which there is no provision for disclosure to the market.
It is worth noting that currently there is no final decision on the agreement terms and conditions related to the TAG divestment process. Also, the possibility of further negotiations with other competitors is not ruled out, following the bidding ranking, as provided for in Article 35 of the Decree, as well as any new rounds of binding proposals, if applicable.
Finally, Petrobras clarifies that there is no exclusivity commitment with Engie, and that all market disclosure phases provided for in the Scheme and the Decree were duly observed, and there are no market communication requirements that were not complied by the Company.