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Petrobras sub-salt transfer to Statoil halted

18 Apr 2017, 3.42 pm GMT

Petrobras sub-salt transfer to Statoil halted

Rio de Janeiro, 18 April (Argus) — A federal court in Brazil issued an injunction that suspends state-controlled Petrobras´ $2.5bn sale of a major sub-salt asset to Norway's Statoil, the latest legal hiccup in the company's divestment plan.

Petrobras agreed to sell its 66pc operating stake in the BM-S-8 block, which encompasses the Carcara sub-salt discovery, to Statoil in July 2016.

The labor union that filed a petition for the injunction asserts that Petrobras ran afoul of public bidding rules for the BM-S-8 stake by negotiating directly with Statoil, and sold the asset below market value.

The court has requested that Petrobras, Statoil and oil regulator ANP provide additional details on the planned transaction.

In a note, Petrobras said the deal was already concluded and approved by regulatory agencies. The company says the first $1.25bn installment from Statoil for the asset has already been used to pay down debt.

Petrobras says it intends to appeal the decision. Statoil could not be reached for comment.

A series of judicial setbacks have forced Petrobras to redesign its almost $35bn 2015-18 divestment plan.

Last month, federal auditors court TCU cleared the firm to proceed with a handful of deals, while other planned sales were required to start from scratch.

Following the TCU decision, Petrobras scrapped a transaction with Australia's Karoon for upstream assets in Brazil because of another union-solicited injunction.

Carcara is one of four sub-salt unitization areas Brazil plans to auction in a second production-sharing licensing round planned for September. Local Statoil executives have said they are interested in acquiring the interconnected portion of the field outside the already contracted area. A delay in the resolution of the latest legal battle risks delaying that round.

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