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Pump Prices Set to Hit $4 a Gallon

Pump Prices Set to Hit $4 a Gallon

U.S. oil prices surpass $80…

Major Energy Firms Could Vie For Brazil’s Opening Natural Gas Sector

Major energy firms could be interested in buying stakes in Brazilian state-held natural gas distribution companies as Brazil is looking to open the sector to more competition, experts have told Reuters.

According to experts and analysts who spoke to Reuters, Brazil’s plan could lead to a wave of privatizations in the natural gas sector. Some major energy firms, including France’s Engie, Spain’s Repsol and Naturgy Energy, Portugal’s GALP, and Brazil’s Cosan SA could be interested in taking stakes in the natural gas distribution sector, consultants and experts told Reuters.  

Brazil adopted at the end of last month a plan to bolster competition in the natural gas sector and called upon companies with a “dominant position” on the market to sell some or all of their interests in gas distribution companies.

This could mean that Brazil’s state-held oil and gas giant Petrobras may be forced to sell stakes in more than half of 27 natural gas distributors across Brazil.

Just last week, Petrobras said that it had signed an agreement with Brazilian antitrust regulator, Administrative Council for Economic Defense (CADE), to sell stakes in a number of natural gas transportation and distribution companies.

“The purpose of the Agreement is to preserve and protect the competitive conditions, aiming to open the Brazilian natural gas market, encouraging new agents to enter this market, as well as suspending administrative procedures established by CADE to investigate Petrobras' natural gas business,” Petrobras said in a stock exchange filing.

At the beginning of this year, reports emerged that Brazil was pushing for major state-owned companies, including Petrobras, to privatize some subsidiaries as the Brazilian government of new far-right President Jair Bolsonaro looks to raise US$20 billion in state asset sales in 2019.

Petrobras said earlier this month that it is putting up for sale two operating shallow-water offshore gas fields and a deepwater oil exploration concession in the Espírito Santo Basin, as part of its efforts to optimize its portfolio and improve capital allocation.

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By Tsvetana Paraskova for Oilprice.com

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