The leading oil company in Brazil, Petrobras, has recently re-entered the African oil and gas ecosystem by acquiring three exploration blocks in the island nation of São Tomé and Principe. This move comes three years after the company sold its assets in Nigeria for a substantial sum of $1.5 billion. The decision to exit Nigeria in 2020 was motivated by a variety of factors, encompassing financial difficulties arising from corruption scandals within the country and a strategic effort to optimise Petrobras’ global portfolio.
On the other hand, due to the surge in oil prices and a revitalised determination to expand globally, the company has experienced a remarkable transformation. In a bid to expand its portfolio and ensure long-term stability, the Brazilian firm has chosen São Tomé and Príncipe as the ideal destination for renewed exploratory endeavours in Africa. This strategic decision aligns perfectly with the company’s mission to venture into uncharted territories, plan new alliances, and replenish its oil and gas reserves.
Supplementary investments made towards asset acquisitions without debt.
However, they announced that the acquisition of three blocks in São Tomé and Príncipe was carried out in strict accordance with all internal and governance procedures of the company. This move aligns perfectly with the Strategic Plan 2024-2028 and is contingent upon obtaining approval from the local regulatory bodies. These assets were formerly under Shell’s ownership, as per reports from Reuters. Following the agreement, Petrobras is going to possess a 45 percent interest in two blocks while holding a stake of 25 percent in the third block.
During an interview with Bloomberg TV, Sergio Leite, Petrobras’ chief financial officer (CFO), unveiled to Bloomberg the company’s intent to pursue asset acquisitions following a period marked by upstream and downstream operations divestments. Speaking further, he acknowledged Petrobras’ divestment of the previous program that had been implemented. In the report, He disclosed that their gross debt stood at $53.3 billion by the conclusion of the first quarter of 2023, representing the lowest level recorded since 2010. Also, he informed Bloomberg that the company will not incur further debt as a result of any supplementary investments made towards asset acquisitions.
Allocation was made towards enhancing exploration and production efforts.
Additionally, Petrobras made an announcement about their capital spending, revealing a staggering $102 billion budget for exploration in the oil and gas sector over the next five years. This plan represents a significant boost compared to their spending in the previous five years and even surpasses their earlier investment plans for the 2024-2028 period, which amounted to $85 billion. The company announced that a significant proportion of the most recent sum, precisely 72 percent, would be allocated to enhancing exploration and production efforts.
Also, the company is currently drilling in the Equatorial Margin, an oil and gas promising region along the Brazilian coast, in order to boost its average daily output from 2.8 million barrels to 3.2 million barrels. In the year 2020, Petrobras made the strategic decision to divest from their Nigerian assets due to both financial challenges and a rapidly changing global energy environment, which was accomplished by successfully finalising the sale of their 50 percent ownership in Petrobras Oil, thereby effectively exiting the Nigerian market.
Africa Oil’s Petrovida seals deal, gains and awaits field reassessment.
Lastly, Africa Oil’s Petrovida Holding BV currently holds the ownership stake previously owned by Petrobras International Braspetro BV. The colossal deal worth $1.53 billion has been recalibrated to $1.45 billion, incorporating interest charges and deductions for fees disbursed to obtain Nigerian government consent. Notably, the company garnered an impressive $103 billion in dividends from Petrobras Oil. The conclusion of the agreement yielded a total of $276 million, along with another $123 million awaiting approval from the Agbami deepwater oil field reassessment. A deferred instalment of $24.8 million was duly transmitted by June 2020.