Global oil traders Vitol and Glencore are in talks to financially back Nigerian firms racing to buy assets owned by Brazil’s Petrobras valued at up to $2 billion, several sources familiar with the matter said.
The potential consortiums including Glencore and Vitol offer the local bidders financial backing that would otherwise be hard to secure directly through international banks.
For the traders, a deal would guarantee access to high-quality crude oil for many years. They would then be able to syndicate out the debt to banks.
Signing up to long-term financing deals to increase volumes and gain exclusive access is one of the traders’ strategies to compensate for increasingly thin profit margins.
Last November, state-controlled Petroleo Brasileiro SA, known as Petrobras, launched the sale of 100 percent of Petrobras Oil & Gas BV, or Petrobras Africa, as part of the heavily-indebted company’s plan to offload $21 billion in assets through 2018 as it also faces a massive corruption scandal.
Petrobras holds half the shares in the company while 40 percent are held by a subsidiary of Grupo BTG Pactual SA and 10 percent by Helios Investment Partners.
Scotiabank is running the process with Evercore, according to the sale launch document.
The venture has stakes in two offshore blocks that contain two producing fields, the major Agbami field in OML 127, operated by a local Chevron affiliate and the Akpo field in OML 130 operated by Total SA.
The assets could fetch as much as $2 billion, according to bankers involved in the process.
Trading and mining giant Glencore was looking to back Nigerian producer Seplat in bidding for the assets.
The world’s top oil trader Vitol is examining backing several bidders in the process, according to the sources.
Swiss-based commodities trader Mercuria was involved in the initial bidding round but was unlikely to continue in the process, sources said.
Oil major BP’s trading division had also considered participating in a possible consortium, but dropped out.
Glencore, Vitol, Mercuria and BP declined to comment. A spokesman for Seplat did not immediately respond to a request for comment.
The result of the auction is expected to be announced in early May but some participants said the assets might not be sold in one package.
Industry sources in Nigeria said the winner of the Petrobras blocks would likely be a local company due in part to government pressure.
While the government already has local content laws, a sale so close to the presidential elections in early 2019 has raised pressure to secure high-profile local involvement in the upstream sector. This has made it more difficult, the sources said, for international companies to bid for the assets without a local partner.
The Akpo field produces nearly 130,000 barrels per day (bpd) of condensate and Total is also due to start production at the Egina development in OML 130 later this year.
The Agbami oilfield is the main prize, however, producing about 240,000 bpd of light, sweet crude. Petrobras holds a 12.5 percent stake in the field, Statoil has 20.2 percent and Chevron holds a 67.3 percent stake.
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