Petrobras divestitures gain strength

June 10, 2019

The STF decision to allow the sale of state-owned subsidiaries without the approval of the National Congress was celebrated by Petrobras, which will now have greater legal certainty to run its divestment program.

” A victory for Brazil, not only for Petrobras and shows that we have a friendly environment for the realization of investments either by Brazilian investors or from other countries, “said Petrobras President Roberto Castello Branco on Friday, after the launching ceremony of the Petrobras Integrated Program for Duct Protection.

According to Castello Branco, the court’s decision will allow the company to raise funds to balance itself financially and invest in exploration and production. “The proceeds from asset sales will be used to reduce debt and to strengthen our oil and gas investments.”

For the president of Petrobras, the sale of assets will increase investment in production with consequent job creation and tax collection. Castello Branco signaled the continuation of the divestment process.

“We have a pipeline of projects (for sale), one of them is already announced [teaser issued], which is Liquigás,” he recalled.

In addition to Liquigás, Petrobras will continue the process of sale of the Associated Gas Company (TAG) to the French company Engie. Following the STF’s decision on the sale of subsidiaries yesterday, Minister Edson Fachin revoked his own injunction suspending the operation.

Another long awaited process by the market is the sale of the eight refineries of Petrobras, which is expected to launch the divestment teaser later this month. An alternative to accelerate refining is to turn refineries into subsidiaries.

In addition, the sale of Petrobras Distribuidora, through the offering of shares, should return to the market’s interest; and the fertilizer factory Araucária Nitrogenados, which was suspended by decision of the Federal Court of Rio de Janeiro last week. The company expects to reach about $ 40 billion in divestitures by 2019.

The Minister of Mines and Energy, Bento Albuquerque, stressed the safety and predictability of the STF decision and the government’s commitment to increase competitiveness in the country. “This is a very important decision for the country. It will provide legal certainty for investors. We are opening the markets for fuels and gas and this will be fundamental for new investments. ”

Source: Brazil Energy Magazine

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