Petrobras’ exit from Nigeria in 2020 was driven by a
combination of factors, including financial struggles stemming from domestic
corruption scandals and a desire to streamline its global portfolio.
However, the company has since undergone a significant
turnaround, bolstered by rising oil prices and a renewed focus on international
expansion.
According to the Brazilian company, the decision to invest
in São Tomé and PrÃncipe marks the resumption of exploratory operations in
Africa with the aim of diversifying its portfolio and is in line with the
company’s long-term strategy, aimed at rebuilding oil and gas reserves by
exploring new frontiers and working in partnership.
The acquisition of three blocks in São Tomé and PrÃncipe
complied with all the company’s internal and governance procedures and is in
line with its Strategic Plan 2024-2028 and is subject to approval by the local
regulatory bodies, Petrobras said on Thursday.
The assets were previously owned by Shell, Reuters reported.
After the deal, Petrobras will hold 45 percent stakes in two of the blocks and
a 25 percent stake in the third one.
In July, Sergio Leite, Petrobras’ chief financial officer,
told Bloomberg the company was on the lookout for potential asset acquisitions
after spending years selling off stakes in upstream and downstream businesses.
“Petrobras had a divestment program,” Leite told Bloomberg
TV. “The company has now changed sides of the table.”
Petrobras reported in May that its gross debt was $53.3
billion at the end of the first quarter of 2023, the lowest level since 2010.
Any additional investments in asset acquisitions will not
put Petrobras into more debt, Leite told Bloomberg.
Then, in November, Petrobras announced it had budgeted $102
billion in capital spending for the next five years, with the bulk of the sum
to be spent on a boost in oil and gas exploration.
The five-year investment plan is a 31 percent increase on
Petrobras’ budget for the previous five years and also an increase on earlier
spending plans for the 2024-2028 period, which totalled $85 billion.
Of the latest total, some 72 percent will go towards
boosting exploration and production, the company said.
Plans are to increase the company’s average daily output to
3.2 million barrels from 2.8 million barrels at the moment. To that end, the
company earlier this week started drilling in an area called the Equatorial
Margin (potentially rich in oil and gas), a region along the Brazilian coast.
In 2020, Petrobras, facing financial difficulties and a
shifting global energy landscape, decided to divest its Nigerian holdings, by
completing the sale of its 50 percent stake in Petrobras Oil & Gas BV to an
Africa Oil Corp. unit for $1.53 billion, resulting in Petrobras fully ceasing
operations in Africa.
Petrobras subsidiary Petrobras International Braspetro BV
previously held the stake sold to Africa Oil’s Petrovida Holding BV. The $1.53
billion was adjusted to a total of $1.45 billion, which reflects interest on
the acquisition price and the deduction of Petrobras’ share of fees paid to the
Nigerian government for the deal’s approval.
Of the $1.45 billion, Petrobras received $1.03 billion in
the form of dividends from Petrobras Oil & Gas, as of the transaction’s
base date of Jan. 1, 2018. Petrobras received $276 million at deal closing and
stands to receive another $123 million following the redetermination process of
the Agbami deepwater oil field. A deferred payment of $24.8 million was made by
the end of June 2020.
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