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Brazil’s Petrobras is in talks with 3R Petroleum Oleo e Gas SA to sell a refinery and dozens of oil fields for more than $1-billion, the company said on Friday, a deal that would prove transformational for 3R if completed.

In a securities filing, Petroleo Brasileiro SA, as the state-run company is formally known, said 3R presented the best offer in public bidding for the assets in the northeastern state of Rio Grande do Norte, known collectively as Polo Potiguar.

For 3R, the completion of the acquisition would more than double the company’s oil production and launch it into the top echelon of Brazil’s independent producers, competing with Enauta Participacoes and PetroRio.

Bilateral negotiations during Petrobras divestments can take anything from a few weeks to a few months. After the terms of the deal have been finalized, Petrobras sometimes opens one final rebidding round, during which competitors can submit offers of any value under the same terms as those agreed upon in the bilateral negotiations.

Reuters reported in June that 3R and private equity firm Seacrest Capital had submitted competing offers for Polo Potiguar.

The value offered by 3R was between $1.1 and $1.3-billion, one person with knowledge of the matter said on Friday.

Petrobras announced in August it was putting Polo Potiguar up for sale. The asset includes 23,000 barrels per day (bpd) of onshore and shallow-water oil production, according to 2020 bidding documents. It also includes the Potiguar Clara Camarao Refinery, which has installed capacity of 39,600 bpd.

A successful sale would be significant for Petrobras’ drive to divest non-core assets in a bid to reduce debt and sharpen its focus on deepwater oil production.

Common shares in 3R were up 4.5 per cent in afternoon trade, while Brazil-listed preferred shares in Petrobras were up 2.6 per cent. Brazil’s benchmark Bovespa equities index was up 1.2 per cent.

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This content appears as provided to The Globe by the originating wire service. It has not been edited by Globe staff.

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