Petrobras selling its assets in Argentina; YPF one of the interested companies
Brazil's state-run oil company Petrobras is putting its Argentine assets up for sale and will start accepting bids from interested buyers as early as this week, Buenos Aires newspaper La Nacion reported Friday.
Petrobras has hired Scotiabank Brasil to handle the sale, and talks have been held with four Argentine oil companies: state-run YPF SA, Tecpetrol, Pluspetrol, and Bridas, La Nacion said, citing local oil executives. A Petrobras spokesperson declined to comment on the report.
Petrobras possible sale of its operations in Argentina--which are largely held by its Petrobras Argentine SA subsidiary--would mark an abrupt change in the Brazilian energy giant's international strategy.
In April, Petrobras Chief Executive Maria das Gracas Foster said the company would continue to invest in Argentina, though developing ultra-deepwater fields found off Brazil's coast is a top priority.
Petrobras Argentina sold a refinery and gas stations to an Argentine investor almost two years ago, and today its assets include a stake in an electric utility as well as oil and gas fields.
Petrobras Argentina share price has cratered this year after Argentine President Cristina Fernandez nationalized YPF in April. Its shares in New York fell 5.3% to 4.83 dollars on Thursday, giving the company a market capitalization of about 1.33bn. The shares stood at a 52-week high of 8.62 in January.
Argentina has proven a difficult market for foreign energy companies due to government policies aimed at keeping domestic oil and gas prices low for consumers and industry. Oil and gas exports are subject to steep export taxes, and up until recently gas prices were capped at levels well below international rates.
President Cristina Fernandez administration recently more than tripled what her government pays YPF for new natural gas production, raising the price to 7.5 dollars per million British thermal units, in a move that signals greater willingness to offer higher prices to attract badly needed investment in Argentina's vast shale gas and oil deposits.