Repsol-YPF to sign $1 billion swap accord Monday

The Brazilian oil major Petroleo Brasileiro SA and Spain's Repsol-YPF SA have finalized an agreement to swap assets, said a Petrobras statement. Signing of the memorandum of understanding will take place on Monday. The transaction was originally announced in April. The assets involved in this swap are worth more than $1 billion; the definitive figure will be released within 2 to 3 months.


RIO DE JANEIRO�The Brazilian oil major Petroleo Brasileiro SA and Spain's Repsol-YPF SA have finalized an agreement to swap assets, said a Petrobras statement. Signing of the memorandum of understanding will take place Monday.

The transaction was originally announced in April (OGJ Online, Apr. 30). The assets involved in this swap are worth more than $1 billion; the definitive figure will be released within 2 to 3 months after a "due diligence" process of adjustment is concluded.

When Repsol acquired YPF in July of last year, it committed to Argentina's government to sell an 11% stake of the company, which today controls 60% of Argentina's oil products market. Argentina's government gave Repsol-YPF until the end of this year to sell the 11% stake.

The agreement says Petrobras will become the owner of EG3, a subsidiary of Repsol-YPF located in Argentina, that has 700 gas stations and a 12% stake of Argentina's automobile fuels market. A refinery in Baia Blanca, Argentina, with the capacity to refine 30,000 b/d will stay with Petrobras.

On the other hand, Repsol-YPF will have the right to sell oil products through 350 Petrobras gas stations in the center, south, and southwestern regions of Brazil. The gas stations sell about 1.4 million l./day of oil products. The Spanish company will have a 30% stake in the Petrobras refinery Alberto Pasqualini, in Rio Grande do Sul state. The plant has a refining capacity of 188,000 b/d, and the two companies will jointly make "strategic investments to upgrade the refinery," said the statement.

Ten percent of the giant Albacora Leste field's reserves in Campos basin, off the Brazilian Rio de Janeiro state, will stay with Repsol-YPF.

Analysts say the agreement with Brazil is highly advantageous to Repsol-YPF because the Brazilian oil products market is three times larger than the Argentine market. Petrobras also benefits because with this agreement the Brazilian company acquires the control of the fourth largest refining and marketing company in Argentina, and at the same time enters into the Argentine market in a good competitive position.

Petrobras said that this is an important step in the company's efforts to become a multinational, with South America as the priority.

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