PetroChina Co., the country’s biggest oil and natural gas producer, will buy Petroleo Brasileiro SA’s assets in Peru for $2.6 billion, expanding its portfolio in the region.
The Beijing-based company will take over three blocks of oil and gas fields in Peru from the seller, known as Petrobras, it said in a statement to the Hong Kong stock exchange. Petrobras owns two blocks entirely and has a 46 percent stake in the third, according to the statement.
Petrobras, the most indebted publicly traded oil company, has been selling assets to help finance projects in Brazil’s deep waters. China National Petroleum Corp., PetroChina’s state- owned parent, already owns oil and gas assets in Peru as well as in Venezuela. If approved, it will be Peru’s second-largest acquisition after Royal Dutch Shell Plc’s purchase of liquefied natural gas assets from Repsol SA in February for $4.4 billion, according to Bloomberg data.
“This will help PetroChina diversify its assets internationally,” Gordon Kwan, a Hong Kong-based analyst at Nomura Holdings Inc., said in a phone interview today. “This will help them learn operating lessons from their partners that they can apply elsewhere.”
PetroChina shares fell 2.4 percent to HK$8.50 at the close in Hong Kong today, taking their decline this year to 23 percent. The city’s benchmark Hang Seng Index dropped 1.9 percent. Petrobras was little changed at 19.55 reais in Sao Paulo at 12:43 p.m. local time.
The two companies won’t disclose the reserves in the blocks, PetroChina spokesman Mao Zefeng said in a phone interview. The Chinese explorer knows the assets well as it and CNPC have operated fields nearby, Mao said. The deal brings “good value,” he said, without elaborating.
CNPC, the most acquisitive energy company in Asia, entered Peru in 1993 and operated at least three oil and gas parcels, according to its website. Peru is the first country where CNPC worked on an overseas project.
The assets called Lot 57, Lot 58 and Lot X are located in Peru’s Amazon jungle and PetroChina’s stake represents 12.1 billion barrels of oil equivalent, said Simon Powell, head of oil and gas research at CLSA Ltd.
“On paper this doesn’t look like it was an expensive deal for PetroChina,” he said. “But this is going to require significant investment in building infrastructure to get it out.”
Petrobras, controlled by Brazil’s government, agreed to sell oil blocks and pipelines in Colombia to Perenco UK Ltd. for $380 million in September to help finance projects in Brazil’s deep waters.
Petrobras, which entered Peru in 1996, produces about 16,000 barrels a day in the country and holds stakes in exploration assets in the Maranon, Huallaga and Madre de Dios basins, according to its website.
Lot 57, in which Petrobras owns 46 percent, is operated by Repsol SA. Repsol said last year that the block’s Kinteroni gas field holds at least 2 trillion cubic feet of natural gas. It announced July 25 that the field is ready to start production.
Lot 58 has 56.6 trillion cubic meters of contingent natural gas resources, according to Petrobras’s website.
Petrobras took a 40 percent stake in an offshore field called Libra, the largest discovery in Brazil’s history, in a government auction on Oct. 21.
Libra is the first auction of subsea prospects, known as pre-salt, using a production-sharing model. The group that won a 35-year concession for the Libra field also includes Royal Dutch Shell Plc and Total SA, each gaining a 20 percent stake. CNPC and Beijing-based Cnooc Ltd. have 10 percent apiece.
State-owned CNPC said in March it would spend $4.2 billion to buy a stake in Eni SpA’s natural gas assets in Mozambique. The Beijing-based producer agreed in September to pay about $5 billion to purchase a stake in the Kashagan oil project from state-backed KazMunaiGaz National Co. in Kazakhstan.
Petrobras said Oct. 8 that it had raised $4.3 billion dollars in asset sales this year, as part of a $9.9 billion divestment plan between 2013 and 2017. It agreed to sell 50 percent of its African assets to Brazil’s Grupo BTG Pactual for $1.5 billion in June.
The Peru deal takes Petrobras’s divestments this year to $7.4 billion, said Bank of America Corp. analysts Frank McGann and Vicente Falanga Neto.
“We view the asset sale positively,” McGann and Falanga Neto wrote in a note to clients dated today, reiterating a buy recommendation for Petrobras. “It should help Petrobras to reduce financing needs and streamline its portfolio.
The state-run producer, which last month reported a 40 percent drop in third-quarter profit, is seeking to finance plans to spend $237 billion through 2017 to build refineries and develop deep-water fields. The company has also requested fuel price increases to phase out subsidies on imported gasoline and diesel.
Everybody is looking at the methodology for gasoline price adjustments,’’ Henri Evrard, an analyst at Infinity Asset Management in Curitiba, Brazil, said by telephone. This is something that has been punishing the company a lot.’’