Brazil's Petrobras Seeks to Exit Gas Distribution Business This Year: CEO

SAO PAULO (Reuters) - Brazil’s state-controlled oil company Petrobras will leave the gas distribution business in Brazil, disposing of all of its assets in the area, Chief Executive Roberto Castello Branco said.

(photo: Petrobras)

At a Sao Paulo stock exchange event, Castello Branco also said Petróleo Brasileiro S.A., as the company is formally known, planned to sell at least one refinery this year and was expecting to receive binding offers for its LPG distribution unit as soon as August.

Petrobras, which is selling tens of billions of dollars of assets to cut debt and refocus on deepwater offshore exploration and production, has already completed some major sales in gas distribution.

In 2016, Petrobras sold its NTS gas pipeline unit in southern Brazil to a consortium led by Brookfield Asset Management SA for $5.2 billion. In April it sold its TAG unit in northern Brazil to France’s Engie SA for $8.6 billion.

“We’re going to open up space, selling companies, getting out of transportation. We’ve already started this process, selling NTS and TAG,” Castello Branco said. “We’re going deeper with pipeline sales. We’re getting out of gas distribution.”

Regarding the company’s LPG distribution unit Liquigas, Castello Branco said Petrobras had already begun making a short-list from the non-binding offers it has received. The company had agreed to sell the unit in 2016 to Brazil’s Ultrapar Participacoes SA, but the deal was blocked by Cade, Brazil’s antitrust body.

“We hope to receive binding offers at the beginning of August,” he said.

The company in April presented a plan to sell off eight refineries, in what is likely to be one of its largest ever divestments.

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