Brazil's Petrobras Advances Divestment Plan in BTG, Cemig Deals

       By Jeff Fick 

    RIO DE JANEIRO--Brazilian state-run energy giant Petroleo Brasileiro (PBR, PETR4.BR), or Petrobras, moved forward with its $9.9 billion divestment plan Friday via deals with investment bank BTG Pactual (BBTG11.BR) and power utility Cemig (CIG, CMIG4.BR).

    The two separate deals are part of divestments planned by Petrobras as it focuses on developing offshore fields in Brazil. Petrobras plans to invest $237 billion through 2017, with much of the cash earmarked for producing oil from the ultradeepwater reservoirs discovered trapped beneath a thick layer of salt. The region, known as the presalt, is estimated to hold as much as 100 billion barrels of crude.

    Petrobras and BTG Pactual announced a joint-venture to explore for oil and natural gas in Africa, where Petrobras has started to shed stakes in minor exploration blocks. BTG Pactual will pay $1.53 billion for a 50% stake in the joint-venture, which will include assets held by an overseas unit of Petrobras known as Petrobras Oil & Gas B.V., the companies said.

    The deal will allow Petrobras to maintain its presence in Angola, Benin, Gabon, Namibia, Nigeria and Tanzania while "sharing the required investments to expand and develop its reserves," Petrobras said in a statement.

    Also Friday, Petrobras said it would sell its stake in Brasil PCH S.A., which operates 13 small hydroelectric dams known as PCHs. Petrobras said it would sell its 49% stake to Cemig Geracao e Transmissao S.A., a unit of Brazilian power company Cemig (CIG, CMIG4.BR), for 650 million Brazilian reais ($303 million).

    Petrobras has made a series of deals in recent months as it shores up its portfolio and boosts its balance sheet while embarking on the world's largest corporate investment plan. In May, Petrobras agreed to sell a stake in an offshore block in Tanzania to Norway's Statoil ASA (STO). The deal, called a farm-out, and outright sales of other exploration concessions over the past 18 months have focused primarily on the company's international holdings. The company recently sold off stakes in six exploration blocks in the U.S. Gulf of Mexico for $110 million.

    Chief Executive Maria das Gracas Foster also said last month that the company was in talks with several groups to sell assets in Argentina, but that no decision had yet been made by the Petrobras's board on the potential sale.

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