Petrobras decides to sell their minority stakes in gas pipelines

5/9/2019

In line with the government’s proposal to reduce the state monopoly in the gas sector, Petrobras decided to put up for sale the remaining stake in the country’s two main gas pipelines, whose control was recently transferred to private partners.

The state-owned company has stakes of 10% in  NTS and TAG, which control the gas pipelines in the Southeast and North and Northeast respectively.

The unbundling of the sector is one of the focus of the project of reduction of the price of natural gas announced by the Ministry of Economy, which will be based on the action of the Cade (Administrative Council for Economic Defense) on monopolies in transportation and distribution of fuel.

In an interview to detail the balance of the first quarter, the president of Petrobras, Roberto Castello Branco, said the company only awaits the conclusion of the transfer of control of TAG to a consortium led by the French company Engie to begin the process of selling the minority stakes.

The sale of TAG was announced in April. At $ 8.6 billion, Engie and the Canadian fund Caisse de Dépôt et Placement du Quebec purchased 90% of the company. The closure of the business, however, still depends on the endorsement of authorities.

The sale of the NTS was completed in April 2017, also with the transfer of 90% of the shares to the investment fund managed by the Canadian Brookfield. The transaction moved US $ 5 billion (almost R $ 20 billion, by the current quotation).

The proposed end of the monopoly presented to the government by the economist Carlos Langoni also suggests that Petrobras should exit the piped gas distribution segment, in which the state-owned company operates directly or through Gaspetro, a company that has Japan’s Mitsui.

It also refers to the assignment of sales contracts and fuel transportation capacity to private producers already operating in the country. Petrobras is responsible for 75% of the national gas production, but is practically the only seller of the product.

Castello Branco did not answer the company’s position regarding the two specific cases, but stressed that since his inauguration he has said that it is opposed to monopolies, both in gas and refining.

“Petrobras is perfectly aligned with the government,” he said.

He denied that there is any internal resistance against the sale of assets in the sector. Two weeks ago, Economy Minister Paulo Guedes criticized a study presented by state technicians proposing a timetable for the end of the monopoly.

Folha reported that there is internal concern regarding the loss of value of assets, both of production and distribution if the government forces the company to undo rapidly this segment.

ISRAEL

Despite the promise of a partnership between Brazil and Israel in the oil field made during President Jair Bolsonaro’s visit to that country in early April, Castello Branco said that Petrobras has no interest in foreign investments at that time.

The state company has come to buy data from areas that will be tendered off the Israeli coast. According to the executive, however, the objective is to increase his knowledge about oil regions around the world.

“At the moment, there is no intention to invest outside Brazil,” said the executive. “First, because we have no money. Second, because it is not in our strategy to be a global company. ”

Source: Folha SP

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