Brazil's state-controlled Petrobras says it is in advanced negotiations with Brazilian fuel distributor Ultrapar to sell a stake in its LPG distribution subsidiary Liquigas.
With less than three months left in the year, Petrobras must sell around $5bn in assets to meet its $14.4bn divestment goal for 2016. The company sold around $700mn in mainly natural gas midstream assets in 2015.
The sale of the LPG distributor could fetch Petrobras up to R2.5bn ($780mn), and thrust Ultrapar into a leading position in Brazilian LPG distribution.
Liquigas currently has 4,800 authorized distributors and around 23pc market share. Ultrapar's own LPG distributor, Ultragaz, also has around 23pc market share. Supergasbras, part of Holland's SHV Energy, holds 21pc market share and the rest is split among smaller, regional firms.
Petrobras first announced the Liquigas spin-off in June, but has not commented on the stake it is looking to sell in the subsidiary.
Petrobras has changed tack on relinquishing controlling stakes in subsidiaries following the May appointment of chief executive Pedro Parente, who replaced outgoing chief executive Aldemir Bendine as part of a broader political upheaval.
Of the around $9bn in asset sales agreed this year, more than $7.5bn have been reached under Parente's command.
Most of that amount relates to a $5.2bn gas pipeline deal with a consortium led by Canadian asset management firm Brookfield, and the $2.5bn sale of a 66pc operating stake in the BM-S-8 exploration block to Norway's Statoil.
In July, Petrobras announced that it was abandoning plans to sell a minority stake in its fuel distribution subsidiary Petrobras Distribuidora (BR), and would instead only retain up to 49pc of voting shares. The company will continue to hold between 60pc-75pc of the company's total capital through preferred shares.
Last week, Ivan Monteiro, the company's chief financial officer, said the response to the change has been positive and the firm has already sent around 90 prospectuses to potential partners.
The sale of the BR stake could generate up to R8bn for Petrobras, but should only be concluded in first half 2017. Petrobras plans to unload another $19.5bn in non-core assets in 2017-18, allowing the firm to focus on deepwater oil production.
Earlier this month, Petrobras announced it was in exclusive talks with Australia's Karoon for 100pc stake in shallow-water 45,000 b/d Baúna field, located in the Santos basin, and 50pc working interest in the deepwater Tartaruga Verde field, located in the Campos basin. The deal, the first under the current divestment plan to cover Brazilian oil-producing assets, should be concluded this year and could fetch up to $1bn.
Petrobras is also working on the sale of stakes in refinery assets; greenfield Brazil fertilizer plants; a textile and petrochemical facility; and 104 onshore and nine shallow-water assets.
