Petrobras Selling Argentine Unit Stake, Province Governor Says

Petroleo Brasileiro SA, the world most indebted oil producer, is selling its controlling stake in an Argentine unit, Neuquen Province Governor Jorge Sapag said.

YPF SA, Pan American Energy LLC, Pluspetrol SA and Tecpetrol SA are among the companies planning to jointly buy about 70 percent of Petrobras Argentina SA owned by the Rio de Janeiro-based parent, Sapag said Thursday. Petrobras, as the Brazilian state-run producer is known, said by e-mail that it doesn’t comment on asset sale negotiations.

Petrobras Argentina’s most lucrative oil and natural gas assets are located in Neuquen province, home to the Vaca Muerta formation, the world’s second-largest shale-gas deposit.

“I was very surprised when they announced the sale to me,” Sapag said in an interview at his home in Neuquen, the Argentina province’s capital. “I only hope the group has the financial strength to fulfill all the investment commitment Petrobras Argentina has with my province and with Argentina.”

Petrobras is cutting spending and selling assets after crude prices tumbled and Brazil’s biggest corruption scandal led to a management reshuffle. The producer plans to raise $15.1 billion from the sales this year and next.

Selling the whole stake to a group rather than separate assets to different buyers will speed up the deal and allow the unit to continue operating as a single company, Sapag said.

Petrobras Argentina, which the parent has failed to sell in three prior attempts, owns filling stations, a refinery, stakes in electricity companies and drilling rights for several oil and gas fields, among other assets.

Regulatory Hurdles

YPF, Argentina’s state-owned oil company, could face antitrust restrictions if it sought to buy the refinery and gasoline stations by itself. Teaming up will allow the buyers to avoid several regulatory approvals in different jurisdictions, Sapag said.

YPF’s press department declined to comment in an e-mailed statement.

Martin Ancarola, a spokesman for Pan American, and Santiago Moreno Hueyo of Pluspetrol had no immediate comments when reached by telephone. Tecpetrol’s press department didn’t immediately reply to calls and e-mails seeking comment.

A few small Argentine companies and a foreign company may join the group of buyers, Sapag said, declining to name them.

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