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Name | Symbol | Market | Type |
---|---|---|---|
Petroleo Brasileiro ADR | NYSE:PBR | NYSE | Depository Receipt |
Price Change | % Change | Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.77 | -4.44% | 16.57 | 16.86 | 16.30 | 16.86 | 11,491,410 | 18:52:41 |
By Paul Kiernan and Rogerio Jelmayer
RIO DE JANEIRO -- Brazilian state oil company Petroleo Brasileiro SA and French oil giant Total SA said Monday they will create a strategic alliance to evaluate and explore energy sector projects.
The alliance will evaluate potential oil, natural gas and energy opportunities in Brazil and overseas, Petrobras said in a statement. Though specific assets weren't mentioned, broadly speaking, Petrobras expects to offer partnership opportunities in Brazil while Total would offer partnerships abroad.
"We've been talking since the beginning of the year, there are some discussions about possible assets that haven't been concluded yet, and we expect to finish as quickly as possible," Petrobras Chief Executive Pedro Parente said at a news conference with his counterpart at Total, Patrick Pouyanné. "In a couple of months we may have firm announcements with regards to that."
An initial focus of the alliance will be development of deep-water oil fields in Brazil, where Petrobras' expertise is seen as unrivaled. The companies would share costs and risks in complex projects requiring high investment, Petrobras said.
In addition to the so-called "upstream" part of the energy industry, Total said it is eyeing the possibility of investing in Brazil's "downstream" sector, namely gas and power, Mr. Pouyanné said.
"The first phase, we want to look specifically at some gas and power assets, which means energy terminals and power plants," he said. "The second phase, we can look beyond, together with Petrobras. You know, for me, Brazil is a big market."
Asked if Total would be interested in BR Distribuidora, the fuel-distribution subsidiary that Petrobras has been shopping since last year, Mr. Pouyanné said it's "not in the first phase of what we want to do."
"I know that my marketing president would answer yes," he said. "Again, it's a big market. It could make sense. But then it's a question of allocation of capital."
Mr. Parente said the partnership could involve "specific assets" in Petrobras' domestic refining business but not the unit as a whole. He declined to give further details "because we're in discussions and there's the whole issue of money involved."
Petrobras is in the midst of an ambitious effort to raise cash to pay down the global oil industry's highest debt load. Between 2015 and 2016, the company has aimed to sell $15.1 billion in assets. For the following two years, it hopes to bring in $19.5 billion through asset sales and partnerships.
Currently, Petrobras and Total are partners in 15 consortiums to explore and produce oil.
Write to Paul Kiernan at paul.kiernan@wsj.com and Rogerio Jelmayer at rogerio.jelmayer@wsj.com
(END) Dow Jones Newswires
October 24, 2016 15:50 ET (19:50 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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