Petroleo Brasileiro SA said it would sell $2.2 billion worth of assets to France’s Total SA, including stakes in oilfields and two thermal power stations.
Petrobras, as the state-run company is known, will receive $1.6 billion in cash in 60 days, when the agreement closes, chief financial officer Ivan Monteiro said in a press briefing. The rest will be received over time.
With the agreement, the total divestment for the last two years ending in 2016 reached $13 billion, Monteiro said, still $2 billion short of the target the company set to reduce its $125 billion debt, the largest in the world’s oil industry.
Chief executive officer Pedro Parente said the remaining $2 billion might have to be added to the company’s 2017 asset sale target.
Under the agreement, Total will acquire stakes in two oilfields in Brazil’s so-called Subsalt Polygon, which covers most of the giant discoveries in undersea reservoirs trapped deep beneath the seabed by a layer of salt.
The French company will get a 22.5 per cent stake in prospect area Iara, currently under development in the Santos Basin. Petrobras will keep a 42.5 per cent interest in the field and continue to be the operator.
Total will buy 35 per cent and operate the Lapa field, also in the Santos Basin, which began producing this week. Petrobras will keep a 10 per cent stake.
The French company will also acquire 50 per cent of two thermal power stations in Bahia state.
Parente said the two companies wanted a partnership beyond the mere transfer of assets.
“This is a strategic partnership and our goal is to reduce our exploration risk and improve the operation in the fields we own together,” said Parente, who was next to Total CEO Patrick Pouyanne during the briefing.
Petrobras and Total are already partners in 19 oilfields worldwide.
Petrobras will have the option of acquiring up to 20 per cent of oilfield Perdido Foldbelt, in the Gulf of Mexico, currently owned by Total and Exxon Mobil Corp.
Parente said the agreement with Total was authorised by Brazil’s audit court, which suspended the oil company’s divestment programme earlier this month.