CNPC in talks to buy Brazil's Barra Energia for $2 billion
SAO PAULO -- China National Petroleum Corp., China's largest oil producer, is in talks to buy Brazilian oil and gas company Barra Energia do Brasil Petroleo e Gas Ltda in a deal which could be worth around $2 billion if completed, a banker with knowledge of the deal said.
"There is no timetable for the conclusion of the deal. The negotiation is regarding the acquisition of the entire control of Barra Energia by the Chinese company," said the banker, who asked not to be identified and is not working directly on the transaction. Bank of America Merrill Lynch was hired to represent Barra Energia, said the banker.
Barra Energia's chief executive officer, Renato Tadeu Bertani, said he wouldn't discuss market rumors when contacted on Wednesday. CNPC wasn't available for comment on Wednesday. Bank of America Merrill Lynch didn't respond to requests for comment.
Late Tuesday, Bloomberg News had reported that CNPC is in talks to acquire Barra Energia for about $2 billion, citing people with knowledge of the matter.
According to Barra's web site, the company was created in 2010 by Mr. Bertani and Joao Carlos de Luca, both of whom previously had long careers at Petrobras before taking other jobs in the private sector.
Barra's existing owners include First Reserve Corporation, a private equity firm that invested $500 million in the firm in May 2010, and Riverstone Holdings, an energy and power-focused private equity firm, which followed up with a further $500 million in April 2011. In May 2011, other private investment funds has committed a further $200 million.
Riverstone declined to comment for this article. First Reserve wasn't immediately available for comment.
The potential deal would continue the increasing presence of Chinese oil companies in Brazil as the Asian nation seeks natural resources for its voracious economy. Several billion-dollar deals have been completed in recent years to tap into Brazil's offshore crude oil riches, with many focused on stakes in an offshore region where billions of barrels of crude were discovered trapped under a thick layer of salt.
China's Sinopec has been the biggest buyer, paying $5.2 billion for a 30% stake in the Brazilian unit of Galp Energia $7 billion for a 40% share of the Brazilian arm of Spanish oil company Repsol YPF. Both Galp and Repsol teamed with Petrobras as partners in the so-called subsalt area, which are expected to more than double Brazil's crude oil output by 2020.
Sinochem also paid $3.1 billion for a 40% stake in the Peregrino field operated by Statoil and snapped up stakes in several other offshore blocks in a separate deal with France's Perenco.
Dow Jones Newswires