Petrobras launches $4.66-bn bid for Eni’s stake in Galp Energy

Petrobras, the Brazilian oil giant, has offered to acquire Italian oil and gas company Eni SpA's 33.34 per cent stake in Portuguese oil company Galp Energy, for €3.5 billion ($4.66 billion), the Diario Economico, a Lisbon business daily today reported.

Talks between Petrobras and Eni about the Galp stake has been going on since 2006 with the Brazilian energy minister Edison Lobao again reigniting the issue in January 2010 that both oil majors have once again opened talks, with a deal expected to be concluded by the end of the year.

Eni is selling its stake since it cannot take full control of Galp, while other major shareholders like Amorim Energia has said that it would not allow the control of Galp to fall into foreign hands.

But a lock-in agreement with Galp's main shareholders Amorim Energia, which has a 33-per cent stake and Portugal's largest bank Caixa Geral de Depositos (CGD) that owns 1 per cent, ended on 31 December 2010, paving the way for the deal to go through.

CGD holds the preference rights on the Galp shares, but it is not expected to use them due to the downturn in the banking sector, according to various Portuguese media reports.

The deal however could be effectively blocked by Angola's state oil company Sonangol E P, which is seeking to increase its stake in Galp through its 45 per cent stake holding in Amorim.

A deal between Petrobras and Galp would strengthen their existing partnership, where their two Portuguese refineries and terminals would give an entry point to Petrobras into Europe.