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CNPC Said to Be Close to Purchaseing Petrobras Assets

Petrobras P-61 oil platform under construction in Brazil
The Petroleo Brasileiro SA P-61 oil platform floats as construction continues in the bay of Angra dos Reis, Brazil. Petrobras, the most indebted publicly traded oil company, has been selling assets to help finance projects in Brazil’s deep waters. Photographer: Dado Galdieri/Bloomberg

Oct. 29 (Bloomberg) -- China National Petroleum Corp., the country’s largest oil producer, is nearing an agreement to buy Petroleo Brasileiro SA’s assets in Peru for more than $2 billion, said three people with knowledge of the matter.

The proposed deal may be announced as soon as next month, said one of the people, who asked not to be identified because the talks are private.

Petrobras, the most indebted publicly traded oil company, has been selling assets to help finance projects in Brazil’s deep waters. The company, controlled by Brazil’s government, agreed to sell oil blocks and pipelines in Colombia to Perenco UK Ltd. for $380 million last month.

CNPC is the most acquisitive Asian energy company this year, according to data compiled by Bloomberg.

Li Runsheng, a CNPC spokesman in Beijing, didn’t answer calls to his office. A Petrobras press officer, who can’t be named under corporate policy, declined to comment on the proposed sale in an e-mailed response to questions.

Petrobras entered Peru in 1996, according to its website. It produces about 16,000 barrels a day in the country and holds stakes in exploration assets in the Maranon, Huallaga and Madre de Dios basins, the website shows.

Divestment Plan

Petrobras declined 2.36 percent to 19.42 reais at 12:58 p.m. in Sao Paulo trading.

Petrobras also owns a 46 percent stake in the Repsol SA-operated Block 57 in Peru’s Amazonian region. Repsol said last year that the block’s Kinteroni gas field holds at least 2 trillion cubic feet of natural gas and announced July 25 that the field is ready to start production. Petrobras said in September 2012 that it was reviewing investments in the block.

Petrobras also owns the so-called Lot 58, with 56.6 trillion cubic meters of contingent natural gas resources, according to its website.

The state-run producer said Oct. 8 that it raised $4.3 billion dollars in asset sales this year, as part of a $9.9 billion divestment plan between 2013 and 2017. Its biggest divestment this year was the $1.5 billion sale of 50 percent of its African assets to Brazil’s Grupo BTG Pactual in June.

Petrobras, which last week reported a 40 percent drop in third-quarter profit, is seeking to finance plans to spend $237 billion to build refineries and develop deep-water fields in the five years through 2017. Petrobras took a 40 percent stake in the Libra field, the largest discovery in Brazil’s history, in a government auction on Oct. 21.

Subsea Prospects

Libra is the first auction of subsea prospects known as pre-salt using a production-sharing model. The group that won a 35-year concession for the Libra field also includes Royal Dutch Shell Plc and Total SA, each gaining a 20 percent stake. CNPC and Beijing-based Cnooc Ltd. have 10 percent apiece.

State-owned CNPC said in March it would spend $4.2 billion to buy a stake in Eni SpA’s natural gas assets in Mozambique. The Beijing-based producer agreed in September to pay about $5 billion to purchase a stake in the Kashagan oil project from state-backed KazMunaiGaz National Co. in Kazakhstan.

To contact the reporters on this story: Zijing Wu in Hong Kong at zwu17@bloomberg.net; Cristiane Lucchesi in Sao Paulo at clucchesi5@bloomberg.net; Rodrigo Orihuela in Rio de Janeiro at rorihuela@bloomberg.net

To contact the editor responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net

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