PETROBRAS WILL SELL $10 BLN

PLATTS - Brazilian state-led oil producer and refiner Petrobras expects to ramp up its divestments in the near term, with a series of deals expected to close by the end of April, according to Chief Executive Roberto Castello Branco.

"An asset-sales program already exists, but now we have a much more aggressive divestment program," Castello Branco said during an event Friday at the private Getulio Vargas Foundation, or FGV. "I believe that in the first four months of the year, we're going to carry out $10 billion in divestments and we intend to do much more than this going forward."

Petrobras currently is targeting $26.9 billion worth of sales in the 2019-2023 period, according to the company's most recent five-year investment plan. But the company announced last week it would expand the sales to additional onshore and shallow-water mature oil and natural gas fields, midstream and downstream assets. The fresh assets are part of the company's new resiliency plan, Petrobras said.

While the sales target appears aggressive given Petrobras' failure to meet its 2017-2018 divestment goal and pending legal challenges to the sales, the company has enough assets currently in the binding phase of negotiations to quickly make good on Castello Branco's forecast.

The biggest asset up for sale is gas pipeline operator Transportadora Associada de Gas, which is expected to fetch more than $7.5 billion. Last week, Petrobras reopened bidding for interested parties that have not yet participated in the sales process and want to submit a binding offer. Petrobras previously was in exclusive talks to sell 90% of TAG to France's Engie.

TAG operates more than 4,505 km of pipelines across 10 states in Brazil's north, northeast and southeast, with 10 compressor stations and 91 access points.

Petrobras is also in the binding phase of talks to sell two fertilizer plants to Russia's Acron.

The company has already completed two deals this year. Petrobras agreed to sell a 70% operating stake in the offshore Maromba Field to BW Offshore for $90 million while also completing the sale of its fuel distribution business in Paraguay to Grupo Copetrol for $381 million.

The asset sales should then accelerate through the rest of 2019, buoyed by a better business climate and the continued opening of Latin America's biggest economy under President Jair Bolsonaro, Castello Branco said. "In 12 months, we'll have three or four times the $10 billion, but this is going to depend on the market."

Petrobras sold about $14 billion worth of assets in the 2017-2018 period.

One of the key areas Castello Branco wants to focus is on the refining market, where Petrobras controls 98% of the country's installed processing capacity. "Petrobras' position, with 98% of refining, is an absurdity," Castello Branco said. "We're going to sell and remove any temptation to exercise this monopoly and, in the end, have less than 50%."

Petrobras' current plan for refinery sales outlines the sale of a 40% minority stake in four refineries divided across two separate packages of assets, one in the northeast and one in the south of Brazil. But Castello Branco said in late February that the model would be revised to include the sale of full operating stakes in several refineries.

While Castello Branco said he would eventually like to fully privatize Petrobras, the executive admitted the government lacked enough political capital to undertake such an unpopular move. Instead, the new management team will try to make Petrobras as lean as it can, Castello Branco said.

"We're going to transform Petrobras into the closest thing possible to a private company," Castello Branco said.

-----

Earlier: 

2019, January, 14, 11:05:00 U.S. NUCLEAR FOR AFRICA ISSUES - Yet the United States still has an opportunity to help interested African nations overcome the obstacles to realizing their energy ambitions. Whereas Russia and China have large government investments in a few advanced nuclear technologies, the United States has a robust and thriving private sector for advanced nuclear development, drawing on both decades of public research and development and a high-tech investment ecosystem. From large national laboratories to small venture-backed start-ups, the United States has over 50 firms working on a diverse portfolio of advanced nuclear designs, many targeting smaller or niche markets.

2019, January, 11, 11:40:00 FAST ENERGY GROWTH U.S. EIA - Energy consumption in Asia, the Middle East, and Africa continues to grow rapidly, with about 20% growth in each region between 2010 and 2016, according to newly available data in EIA’s International Energy Statistics database. In particular, energy consumption has been increasing in the Middle East and Africa, driven by economic growth, increased access to energy markets, and quickly growing populations. Energy consumption in Asia grew even as energy consumption in China declined between 2015 and 2016.

2018, December, 3, 11:35:00 SOUTH AFRICA'S NUCLEAR WNN - Energy infrastructure is a critical component of South Africa's National Development Plan (NDP), which was published in 2011 and identifies the need for investment in a strong network of economic infrastructure designed to support the country’s medium- and long-term economic and social objectives. The IRP plays a crucial role in contributing to the objectives of the NDP, the Committee said in its report.

2018, November, 22, 10:35:00 SOUTH AFRICA'S LAGGING IMF - Some of the negative effects of the changing external environment are already being felt in South Africa despite its economic resilience.

2018, September, 13, 14:00:00 NUCLEAR POWER NEEDS INVESTMENT IAEA - Overall, the new projections suggest that nuclear power may struggle to maintain its current place in the world’s energy mix. In the low case to 2030, the projections show nuclear electricity generating capacity falling by more than 10% from a net installed capacity of 392 gigawatts (electrical) (GW(e)) at the end of 2017. In the high case, generating capacity increases 30% to 511 GW(e), a drop of 45 GW(e) from last year’s projection. Longer term, generating capacity declines to 2040 in the low case before rebounding to 2030 levels by mid-century, when nuclear is seen providing 2.8% of global generating capacity compared with 5.7% today.

2018, August, 29, 10:10:00 SOUTH AFRICA NUCLEAR STATIC WNN - A draft updated Integrated Resource Plan (IRP) approved by South Africa's cabinet on 22 August sees the country's nuclear capacity remaining at its current 1830 MWe over the period to 2030. Energy Minister Jeff Radebe yesterday released the plan for public comment.

2018, August, 3, 09:15:00 SOUTH AFRICA: NEGATIVE GROWTH IMF - Amid a marked growth deceleration, some of South Africa’s economic and social achievements after the end of apartheid have recently unwound. While the economy is globally positioned, sophisticated, and diversified, gaps in physical infrastructure and education create large productivity differentials across sectors. Low consumer and business confidence has dampened productivity growth. Fast growing debt has constrained policy space. As a result, per-capita growth has turned negative, the poverty rate stands at around 40 percent, unemployment has crept up to 27 percent—almost twice that level for the youth—and income inequality is one of the highest globally.