Petrobras (PBR) To Sell Okinawa Refinery For $129.3 Million
Zacks Investment Research | Oct 18, 2016 09:44PM ET
Brazil’s state-run energy giant, Petroleo Brasileiro S.A. or Petrobras (NYSE:PBR) recently reported that it has signed an agreement to sell its Okinawa refinery and related assets to Japan’s Taiyo Oil for $129.3 million. The deal is in line with the company’s plans to raise cash and scale back international operations.
The refinery – Nansei Seikyu – currently fulfills about half the fuel needs for the Japanese island and has a capacity to produce 100,000 barrels a day. Additionally, the refinery includes three piers and 36 storage tanks that can hold 9.5 million barrels of crude and oil products.
In 2007, Petrobras had purchased 87.5% stake in Nansei Seikyu refinery for about $50 million from a subsidiary of ExxonMobil Corporation (NYSE:XOM) . The company acquired complete ownership of the refinery in 2010. However, the company was forced to close refining operations at the facility last year and has been considering selling the refinery since then.
This deal is in line with the company’s plan to divest assets worth $15.1 billion for the 2015-2016 period to reduce its debt. Under this strategy, Petrobras has already divested assets in Argentina, Chile and Brazil. In July, the company sold its Carcara offshore field to Norway’s Statoil (OL:STL) ASA (NYSE:STO) for $2.5 billion. Notably, this was one of the biggest sales in the company’s history. Petrobras will have to undertake asset sales worth $6 billion to reach its goal after the sale of Nova Transportadora.
Petrobras, with net debt of around $103.56 billion, is the most indebted energy company in the world. The company is undergoing a deep financial crisis due to low oil prices and the loss of goodwill owing to the discovery of massive corruption within its ranks.
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