A Review of the Nigerian Energy Industry

Petrobras denies hiring JPMorgan for subsalt license sales

28 February 2015, News Wires – Petróleo Brasileiro SA denied on Friday that it has hired JPMorgan Chase & Co to handle the sale of oil exploration licenses in deep-sea areas off the coast this year.

petrobrasIn a securities filing, the state-controlled oil producer known as Petrobras reiterated the need to reduce capital investments, dispose of assets and step up divestitures to preserve cash.

Petrobras also said JPMorgan did not have a mandate to map out potential investors interested in acquiring licenses for subsalt oil reserves currently held by Petrobras.

The company is in touch with banks to refinance existing credit lines or tap new ones, the filing said. The filing came after Brazil’s securities regulator CVM requested clarifications from Petrobras following a report in the O Estado de S.Paulo newspaper that it was looking to sell subsalt drilling licenses.

Subsalt refers to deep-sea oil resources off Brazil’s coast, trapped beneath a layer of mineral salts under the seabed. On Wednesday, Reuters reported that Petrobras hired JPMorgan to advise on the sale of about $3 billion in assets, as fallout from a corruption scandal shut access to financing.

Some of the assets included property and licenses outside the subsalt area. Asset sales have become imperative after Moody’s Investors Service stripped the company of its investment-grade rating and warned further cuts were possible. Worries over a looming cash crunch and the scandal were behind the downgrade, Moody’s said.


– Reuters

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