CNPC Said to Weigh Buying Petrobras Assets in South America
OREANDA-NEWS. July 30, 2013. China National Petroleum Corp., the country’s largest oil producer, is considering buying Petroleo Brasileiro SA assets in South America, three people with knowledge of the matter said.
The assets in Colombia and Peru could be worth about a combined USD2 billion and CNPC may face competition from other South American producers, said two of the people, who asked not to be identified because the information is private.
Petrobras (PBR), the most indebted publicly traded oil company, has been shedding assets to help finance projects in Brazil’s deep waters. State-run Petrobras sold half of its African assets to Grupo BTG Pactual SA (BBTG11) for USD 1.5 billion last month. CNPC has been the most acquisitive Asian energy company this year, according to data compiled by Bloomberg.
“The move is in line with CNPC’s overall strategy to expand its upstream assets globally, as the company tries to grab more assets while crude prices stay relatively stable,” Grace Liu, an oil analyst with Guotai Junan Securities Ltd., said by phone from Shenzhen. “CNPC and PetroChina already own many assets in South America, so adding a few more would not be as risky as venturing into a totally new region.”
PetroChina Co. is CNPC’s Hong Kong-traded unit. Brent, a benchmark that helps determine the price of more than half the world’s oil, averaged USD 105.68 a barrel in the past year, compared with USD 104.38 per barrel in the prior twelve months.
Rio De Janeiro-based Petrobras declined to comment on the sale of the Peru and Colombia assets. CNPC’s Beijing-based spokesman Li Runsheng did not answer two calls to his office.
Petrobras is seeking funds to support its plans to spend USD 237 billion in the five years through 2017. Investments are set to surge as it develops the ultra-deepwater Libra field, Brazil’s largest discovery.
Continued Hunt
State-owned CNPC in March announced it will spend USD 4.2 billion to buy a stake in Eni SpA (ENI)’s African natural gas assets in Mozambique. The Beijing-based producer is also set to pay about USD 5 billion to purchase a stake in Kashagan project from state-backed KazMunaiGaz National Co. in Kazakhstan, people with knowledge of the matter said last month.
Chinese companies will continue to hunt for natural resources assets overseas, especially in so-called frontier markets, said Fang Fang, JPMorgan Chase & Co. (JPM)’s investment banking head for China, in an interview in Beijing.
Firms from China purchased about USD 28 billion worth of assets abroad in the first half of the year, about the same as the year-earlier period, data compiled by Bloomberg show. Dealmaking still lags behind 2009, when a record USD 37 billion of outbound transactions were struck in the first half, the data show.
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