International
Brazil’s Petrobras to sell stake in Argentinian natural gas processing unit MEGA
Rio de Janeiro – Brazilian state-led oil company Petrobras plans to sell its 34% stake in Argentinian natural gas processing company MEGA, the latest in an accelerating wave of asset sales under the leadership of new Chief Executive Roberto Castello Branco, Petrobras said in a statement Monday.
MEGA owns a gas separation plant in the heart of the Loma La Lata Field that can process up to 40 million cu m/d, Petrobras said. In addition, the company also operates a fractioning plant at the Bahia Blanca petrochemicals complex that can process 5 million cu m/d into butane, ethane and propane, Petrobras said. The two plants are linked by a 600 km, 12-inch diameter pipeline.
“Mega has one of the biggest natural gas-processing installations in Argentina,” Petrobras said, noting that the company is “essential” to Argentina’s petrochemicals infrastructure.
The company also has plenty of upside, given Argentina’s outlook for rising gas production from the Vaca Muerta shale formation, Petrobras said. “Studies to increase the plants’ capacity and gas-supply pipelines are already underway,” Petrobras said. The plants, which started operations in 2001, were constructed using the latest technology and efficiency equipment, Petrobras said.
Argentina’s YPF owns 38%, while Dow Chemical retains the remaining 28% share, Petrobras said.
Companies or investors interested in participating in the sales process should have had at least $200 million in net revenue or assets under management in 2018, according to Petrobras.
Petrobras is in the process of updating its $26.9 billion divestment program, announced last year as part of the company’s 2019-2023 investment plan, including the late March announcement that Petrobras will sell 100% stakes in eight refineries totaling 1.1 million b/d of capacity. Castello Branco, who took over as top executive in early January, has pledged to shed assets quickly, backing up the promise by closing more than $10 billion worth of deals about a month ahead of the executive’s self-imposed, end-May deadline.
The company’s 2020-2024 investment plan is expected to be released in the fourth quarter, according to Petrobras.
The divestment program, which started in 2014 shortly after a corruption scandal was uncovered at the company, aims to refocus Petrobras on its core area of deep-water exploration and production, especially in the subsalt frontier offshore Brazil. The program included the sale of mature onshore and offshore fields, as well as the company’s exit or reduced role in several industries such as biofuels, fertilizers, refining and natural gas distribution.