By BEN LEFEBVRE and RYAN DEZEMBER
Petroleo Brasileiro SA, or Petrobras, has enlisted
Citigroup to shop its Houston-area refinery as the Brazilian
state-run oil company continues to shed assets to help fund
offshore drilling back home, according to people with knowledge
of the sale effort.
A sale of the 100,000-bpd refinery will likely result in a
loss for the company, which paid nearly $1.2 billion for the
facility, one of these people said.
Petrobras acquired a 50% stake in the refinery in 2006, paying a
subsidiary of Belgian commodities trader Transcor Astra Group
S.A. about $360 million.
Then, after a lengthy legal battle with its partner, Petrobras
acquired the 50% it didn't already own in July. Petrobras paid
$820.5 million, with $466 million set as the value of the
property and the remainder covering legal fees and interest
The price has prompted Brazilian lawmakers to question the
purchase, according to local media outlets, which last week
reported that the Brazilian Congress would call on a Petrobras
executive to answer questions about the deal.
On Tuesday, a spokeswoman said the company was "unaware of any
request to appear before Brazil's Congress at this time."
Still, the refinery could hold allure to some,
primarily because of its location, said Morningstar analyst
Located it in Pasadena, Texas, just south of Houston, it is
well positioned to receive the growing crude supplies coming
out of shale formations in south and west Texas, Mr. Good said.
And its location on the Houston Ship Channel connects it to
important export markets, he said.
More than half of the Pasadena refinery's output is
gasoline, a fuel for which demand is rising in Latin American
Petrobras is in the early stages of an effort to divest some
$15 billion of assets before 2017 as it looks to raise money to
fund development of its prolific yet expensive-to-drill fields
deep off Brazil's coast.
Petrobras has said it plans to spend $237 billion developing
those so-called subsalt fields.
Late Monday, Petrobras announced the sale of a 40% stake in
an offshore block in Brazil to oil producer OGX Petroleo e Gas
Participacoes for $270 million. In the US, Petrobras has hired
Morgan Stanley to help it find a buyer for a stake in its Gulf
of Mexico fields, which could bring in up to $4 billion,
The Wall Street Journal earlier reported.
Meanwhile, the mandate to sell the refinery marks another success for
Citigroup's energy bankers, who are having a banner year in
what has been the best year on record for oil-and-gas mergers
and acquisitions by dollar volume.
Citigroup leads other financial institutions, advising on
$101.3 billion worth of announced oil and gas deals this year,
according to data provider Dealogic. In all, there have been
nearly $296 billion worth such deals, excluding spinoffs and
repurchases, meaning Citi has had a hand in roughly 31% of the
year's global oil-and-gas transactions, according to
Dow Jones Newswires