The Gulf of Mexico assets are part of a planned divestment of about $14.5 billion in the company’s assets as it seeks to cut costs and maintain the vast investment it needs to make to develop its fields offshore of Brazil.
For a sale of that size, Petrobras will need a deep-pocketed buyer. Reports on Brazilian TV have indicated that the usual suspects are lined up: Royal Dutch Shell PLC (NYSE: RDS-A) (RDS-B), Exxon Mobil Corp. (NYSE: XOM), Chevron Corp. (NYSE: CVX) and BP PLC (NYSE: BP).
BP, which is in the processing of shedding assets itself, is not a likely buyer, but we could see an offer come in from a Chinese company. For that to happen, a lot depends on the success of CNOOC Ltd.’s (NYSE: CEO) $15.1 billion bid to acquire Nexen Corp. (NYSE: NXY). Around 10% of Nexen’s assets are located in the United States, which requires that the U.S. give its approval for the deal. That is not a slam-dunk.
It is easy to imagine that Petrobras would be unwilling to entertain an offer from a Chinese oil company if the CNOOC-Nexen deal is scrubbed. Chinese firms may even decide not to make an offer. And even if that deal goes through, the next deal that would put more U.S.-based assets in Chinese hands might have a very slim chance of success.
Paul Ausick
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