RIO DE JANEIRO (Reuters) – Petrobras is in the advanced stages of several major divestments, executives said on Thursday, suggesting that the company’s ambitious deleveraging program could accelerate after a lull during Brazil’s worst coronavirus outbreak.
Speaking to analysts after the company’s third-quarter results, executives at Petroleo Brasileiro SA PETR4.SA, as the state-owned oil company is officially called, said it hopes to complete negotiations to sell the RLAM refinery by the end of the year and recently received a binding offer for the REMAN refinery, in the Amazon city of Manaus.
The company expects to receive binding offers for the REPAR refinery in southern Brazil in December, they added.
Petrobras has sought to sell dozens of non-core assets in recent years in a bid to reduce debt and sharpen its focus on offshore oil production and exploration. Among the divestments are sales of nine refineries which are expected to raise more than $ 10 billion cumulatively for the company.
But the divestment process has struggled in recent months amid falling crude oil prices and a more general slowdown in the global economy.
The company expects Brazil’s antitrust authorities to approve the sale of its Liquigas gas distribution unit in November, said Chief Financial Officer Andrea Almeida.
The company is also continuing to examine initial public offerings for its middle offshore asset collection, he added.
Executives are not very optimistic about some of the other divestments.
Chief Executive Roberto Castello Branco said plans to sell his stake in the TBG gas pipeline unit, which links Brazil and Bolivia, were hampered by regulatory issues.
The company will not sell its stake in the Braskem SA petrochemical company BRKM5.SA until the company makes significant improvements in terms of governance and environmental obligations, he added.
Brazil-listed preferred stock in Petrobras rose 2.3% in afternoon trade, after the company beat margin forecasts late Wednesday, even as profit missed expectations on a one-time fee.
Brazil’s benchmark Bovespa equity index .BVSP up 1.2%.
In terms of production, executives marked a moderate drop in fourth quarter output and an increase in lifting costs due to scheduled maintenance. However, they said, a number of new wells had been operating in some of the company’s most promising offshore fields in the fourth quarter.
The company has noticed a short-term decline in demand for its products in Europe due to the rise of COVID-19 there, said André Chiarini, head of logistics and trading of the company. However, demand for Petrobras fuel in China remains strong, he added.
Reporting by Gram Slattery and Luciano Costa; Edited by Kirsten Donovan and David Evans