RIO DE JANEIRO�Brazilian company Petroleo Brasileiro SA (Petrobras) has concluded negotiations over a $1 billion asset swap with the Spanish/Argentine oil company Repsol-YPF SA.
Petrobras will take a 99.5% stake in Repsol-YPF subsidiary EG3, which has 700 gas stations and a 30,500 b/d refinery in Argentina. Repsol-YPF will take 30% in a Brazilian refinery, control of 250 gas stations and a 10% stake in the giant Albacora Leste oil field, in Campos basin off Rio de Janeiro state (OGJ Online, July 28, 2000).
"The end of the negotiations permits Petrobras to take a great step toward the realization of its international strategy, focused on expansion of its activities in Latin America," the company said.
A letter of intent was signed in October of 1999, and due diligence began in July. Each company agreed on the final details to trade assets worth about $500 million, bringing the estimated total of the swap to about $1 billion, Petrobras said.
"The deal was the first of its kind, given the complexity of the business areas and the cultural differences of the three countries (Brazil, Argentina, and Spain) involved," said Petrobras, which controls 11 of Brazil's 13 refineries and owns two refineries in Bolivia.
Petrobras traded a 30% stake in the REFAP SA refinery in southern Brazil.
Sales from the Petobras Distribuidora gas stations handed over to Repsol-YPF in the deal total about 40,000 cu m per month of oil products.
With the acquisition of EG3, Brazil will gain a 12% share of the Argentine oil products market.
As part of the deal, Repsol-YPF will invest with Petrobras in an upgrade project at the REFAP refinery worth $650 million. The goal is to modernize the refinery in order to raise output to 180,000 b/d of oil products, Petrobras said.
The deal will be submitted for regulatory approval in each of the three countries.
