Petrobras set to auction Nigerian offshore assets worth $5 bn: report

Petroleo Brasileiro SA (Petrobras) is set to sell its interests in Nigerian offshore oil fields, a sale that may fetch the Brazilian oil giant up to $5 billion, Reuters yesterday reported, citing people close to the matter.

The state-controlled company has hired Standard Chartered to run an auction, which is expected to begin in the next two months, banking and oil industry sources told the news agency.

The assets for sale are its 8-per cent stake in the Nigerian offshore Agbami blocks, where US energy major Chevron is the operator, and its 20-per cent interest in the offshore Akpo project, operated by French energy giant Total.

Discovered in 1998 and located in the Niger delta, the Agbami field is estimated to hold reserves of 900 million barrels of oil. The Agbami block contains light and sweet crude with low levels of contaminants.

First oil from the block was produced in July 2008 and output can reach 250,000 barrels per day.

Chevron, the operator of the field holds a 68.2-per cent stake, while its partners - the Nigerian National Petroleum Co (NNPC), Famfa Oil, Petrobras, and Statoil - hold the rest.

Located 200km offshore Nigeria, Akpo has proven and probable reserves of 620 million barrels of light condensate oil and more than 28 billion cubic meters of gas.

Akpo began production in 2009 and has output of 175,000 bpd of light condensate oil and 9 million cubic meters of gas.

Total is the operator of Akpo with 24 per cent interest, and other stakeholders include NNPC, Nigeria's Sapetro, China's Cnooc, and Petrobras.

The sale is part of the Rio de Janeiro-based company's plan to sell non-core assets worth around $14.8 billion in order to fund its massive $236 billion five-year oil exploration and expansion plan, which may allow it to overtake the output of all OPEC members except Saudi Arabia.

It recently was forced to reduce its assets sale target to $9.9 billion after it failed to get good offers for its Gulf of Mexico assets, where it was expecting around $4 billion.

It is now in advance talks to sell stakes in its refineries and other assets in Argentina to local company Oil Combustibles, for $400 million. (See: Petrobras in talks to sell stakes in Argentinean refineries to Oil Combustibles for $400 mn)

Petrobras, the world's 12th largest oil and gas producer, operates in 28 countries across five continents, has over 100 production platforms, 16 refineries, 30,000 kms of pipelines and more than 6,000 service stations.

Its has proven reserves of around 14 billion barrels of oil, a figure that could nearly be doubled with the Tupi and Iara find thereby slowly moving towards recovering the unofficial estimated oil reserves contained in the subsalt band.

Analysts say that up to $600 billion worth of investment in research, logistics and technology are required to extract the oil below a thick layer of salt at depths of up to 7,000 meters (23,965 feet) under Brazil's Atlantic waters.