Changes at state-owned energy companies grappling with demonopolization and deregulation in their countries' energy sectors top this week's company news.
Brazil's Commerce Minister Alcides Tapias has announced that the government plans to sell 32% of Petroleo Brasiliero SA's shares by late July.
In a move intended to prepare Gaz de France (GdF) for deregulation of the European Union gas market-scheduled for Aug. 10-Chairman and CEO Pierre Gadonneix has organized the state-owned gas monopoly utility into five business units, each with a relative degree of autonomy.
Meanwhile, the Romanian government has approved the reorganization of the natural gas utility Romgaz.
In other company news, Elf Atochem shareholders have approved merger of the former Elf Aquitaine SA chemicals unit into TotalFinaElf SA. The unit is now named Atofina.
Petrobras
Brazil first announced plans for the offering last March (OGJ, Mar. 29, 1999, Newsletter). The sale will be open to domestic and foreign investors, although there are limits on the number of shares any one entity can buy, so as to control any outsider's influence over the largely state-owned firm.
"Brazil's government would retain control over Petrobras even after the sale," said Tapias. "It's a minority stake we're proposing to sell."
After the block of shares is sold, the government will hold a 51% controlling stake in Petrobras.
Tapias says the sale is in the national interest, because it will enable the government to raise money and pay down debt without surrendering control over Petrobras. The sale is expected to bring in at least 8 billion real.
The National Economic and Social Development Bank may finance share buyers, said Minister of Mines and Energy Rodolpho Tourinho.
Tourinho believes that now is an opportune time to sell the stock, because the Petrobras share price is strong.
Petrobras will maintain its monopoly over imports of oil and oil products into Brazil until Dec. 31, 2001, according to a recent government decree.
Brazil postponed for 16 months the opening of the country's oil market; authorities will send a bill to Congress to approve the plan.
The government had planned to open the market by Aug. 7, 2000, but Tourinho and Finance Minister Pedro Malan say the delay is necessary in light of postponements suffered by the government's fiscal reform plan.
Specifically, the government will open the market only after it has a replacement scheme for its PPE (specific price share) tax, which this year should bring $1.93 billion in income for the government.
GdF
The GdF restructuring "ellipseis in line with the group's strategy to integrate the whole gas chain, from production to energy services," the company said.
The traditional units of services, distribution, infrastructure, marketing, and exploration-production are being made free-standing entities, reflecting their importance in shaping the group's future development. Previously, E&P was part of the research division; research manager Michel Bayle is now in charge of the unit.
The shift confirms GdF's determination to become a major gas producer. Its 2005 target is to produce 15% of the gas it markets.
As the world's largest gas buyer, marketing is a key division. It will be handled by the commercial manager Jean-Louis Mathias, assisted by Jean Abiteboul, who was previously in charge of gas supplies.
Although France's Parliament will be far from ready in mid-August to transpose the EU gas directive into French law, Gadonneix is determined to open up 20% of GdF's French market to competition on the appointed date. This will involve 150 customers with gas consumption in excess of 25 million cu m/year and will put an end to GdF's gas import monopoly.
Observers believe, however, that this will not suffice to bolster the firm's position in a newly competitive market. This will require alliances or other shareholders besides the state. Much has been said about this, even within the government. But the left-wing alliance now in power is wary of the powerful communist trade union CGT, which refuses to sanction what it sees as "denationalization" of the utility.
Romgaz
The Romgaz restructuring calls for the separation of the operations of the national corporation and the setting up of four business operators: Transgaz, a national transportation corporation; Depogaz, which will oversee the underground storage of natural gas; Exprogaz, which will produce and trade oil products as well as conduct hydrocarbon exploration; and an unnamed distribution company with two subsidiaries.
All the companies will remain in the portfolio of the Trade and Industry Ministry, which will continue to exercise all rights due to its position as the state's shareholder.
Atofina
With sales of 114 billion francs and a workforce of 70,000, Atofina ranks fifth worldwide, according to TotalFinaElf.
New Chairman and CEO François Corn?lis has taken over for Jacques Puéchal, who built the group and oversaw its integration into TotaFinaElf. Puéchal is retiring (see Personnel Moves and Promotions, p. 30).
Atofina integrates Total SA's specialty chemicals business, Petrofina SA's and Atochem's petrochemicals businesses, and Atochem's intermediates and performance chemicals businesses.
Cornélis said the new Atofina will stand on three legs: petrochemicals and plastics, with world-scale units; intermediates and performance polymers, which will be process-driven; and specialties, which will be customer-driven. The latter, said Corn?lis, may possibly be spun off later into an affiliate because of the strength of its brands.
Synergies worth 310 million euros will be drawn from purchases, organization, processes, logistics, client approach, research integration, and TotalFinaElf's refinery sites, according to the firm. The division's return on capital employed target is 14%, assuming oil prices of $15-17/bbl.
