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    Brazil's Petrobras divests stake in Gaspetro for $400mn


The deal depends on Japan's Mitsui waiving its pre-emptive rights to the position.

by: Joseph Murphy

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Brazil's Petrobras divests stake in Gaspetro for $400mn

Brazilian state oil company Petrobras has agreed to sell a 51% interest in gas distribution holding Gaspetro for 2.03bn reais ($400mn) to Compass, a subsidiary of Brazilian energy group Cosan, the companies reported on July 29.

Gaspetro has interests in 19 gas distribution companies operating 10,000 km of pipeline across Brazil that serve over 500,000 customers around 2.9mn m3/day of gas. But its operations are dwarfed by those of Compass, the country's largest gas distributor with a 19,000-km network serving 2.1mn customers in 94 municipalities in the state of Sao Paulo.

Petrobras is in the midst of a sweeping divestment programme, aimed at raising cash from the sale of non-core upstream, midstream and downstream assets to pay down its debts and invest more in deepwater oil projects. Earlier this month it closed the sale of eight onshore oil and gas producing fields to local operator 3R Petroleum Oil and Gas.

Petrobras also noted the deal also formed part of its staged withdrawal from Brazil's gas distribution and transport market, as required under a anti-monopoly order, in order to liberalise the sector.

The deal needs regulatory approval to be closed, and it also depends on Japan's Mitsui, which owns the remaining 49% in Gaspetro, waiving its preemptive right to Petrobras' position. Mitsui bought its share in December 2015 for 1.93bn reais.