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Petrobras after Exxon's downstream assets in S. America

Thursday, January 31st 2008 - 20:00 UTC
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Brazil's government managed Petrobras will bid strongly for Exxon's downstream assets in South America, O Globo newspaper reported this week from Rio do Janeiro.

Citing a high-ranking energy sector source after a Petrobras board meeting last Monday, O Globo said cabinet chief Dilma Rousseff told the company to "make a bid and let it be the winning one" for Exxon Mobil Corp's Esso unit. Rousseff is the board president at Petrobras. Petrobras has been evaluating for months the purchase of Exxon's Esso-branded assets in South America, which include a refinery in Argentina and hundreds of service stations across the continent. In Brazil Esso accounts for more than 7% of the fuel-distribution market and analysts say its assets in may be worth 700 million US dollars or more. Exxon has been silent on the possible sale, but Petrobras last year confirmed Exxon's interest in selling its assets in Argentina, Brazil, Chile, Paraguay and Uruguay. In Uruguay Petrobras purchased Royal Dutch Shell's service stations and the assets of the local pipeline gas distributor which belonged to Gaz de France. Exxon quit Venezuela last year following the oil industry nationalization drive by President Hugo Chavez and has been seeking to reduce its holdings in Latin America. Brazilian media said Royal Dutch Shell, investment fund Ashmore, local petrochemical group Ultra/Ipiranga, and a consortium formed by sugar and ethanol giant Cosan and Cristal sugar refinery are also after Esso's assets. Petrobras already controls nearly half of all fuel distribution in Brazil and some analysts say antitrust regulators may bar it from buying additional service stations in the country, but not elsewhere in South America.

Categories: Energy & Oil, Brazil.

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