Main points in regard to karoon:
What alternative exists for the sale of assets?
This program is not an alternative, it is not a choice. It is a necessity, we need this program. We did stretching the debt profile. We swapped old debt for new debt, but that does not change the size of the debt.
*** my view -> this is basically what the judge said in the NTS case.
What are the main changes required by the TCU?
We send invitations to all possible interested parties that may fit the requirements of the project, but we do not make a public announcement. The TCU thinks that it does not agree with the principles of the publicity. We will follow the guidance of the Court, continue to choose, but we will give publicity.
*** my view -> I like it that petrobras will still continue to CHOOSE... so what it did with karoon is not so different. remember if the TCU rules are completely different to how petrobras operated then we may have hurdles. The fact that Petrobras will still continue to choose its parties is important. Public? well lets be honest here -- it was in the papers for 12 months before announced that petrobras was selling bauna/ golfino & tartaruga.
Will these changes in procedures be retroactive to business already in progress?
There were five operations that were well advanced that we were able to continue, although two were not completed by injunctions (sale of the Green Turtle and Bauna fields and fields in the Gulf of Mexico). It has projects in advanced stage within the previous systematics, a third set of very preliminary transactions. For those in an advanced stage, we do not know what TCU's orientation will be. Ministers will decide Wednesday. It is important to make sure that the process is not attacked in the future. Ideally, the matter should be set as soon as possible.
*** my view -> Wednesday is key(Thursday our time).. however it looks like "well advanced" will not have any change (that is bauna/tartaruga). IMPORTANT.
Can such a delay in the sale of assets drive away potential stakeholders?
Yes you can. Some already know Brazil and understand these comings and goings. Those who do not know are more scared. There was no formal withdrawal, but one of the interested companies has already demobilized the team.
Was it the case of the Australian Karoon, who was negotiating the purchase of the Green Turtle and Bauna fields?
I can not comment on specific cases.
*** my view --> I believe this is WOODSIDE, they pulled out of brazil and therefore left karoon less one member of their contingent. We don't know how this impacts financing, but I think we can assume karoon will find another way to fund. The next question was a leading question as the reporter obviously knew karoons partner pulled out.
Full interview below (globo website / google translate).
RIO - Almost ten months after taking office, surrounded by injunctions and regulatory requirements, Petrobras President Pedro Parente says the company has improved from an operational standpoint, "but it still has the same debt of US $ 100 billion, the world's largest among companies in the industry. " According to him, "selling assets is not a choice, it's a necessity" to guarantee the future of Petrobras.
Petrobras is facing a number of problems. One of them with the TCU. How will you deal with them?
It is important to make it clear that the company has improved operationally, but continued to have net debt in excess of $ 100.3 billion in the third quarter of 2016. Our obligation is to draw attention to the fact that, from a patrimonial point of view, the problem is the same size.
Is Petrobras still in crisis?
It is still an extremely high debt, yet it is the largest debt of all relevant oil companies around the world. Therefore, this divestment program is fundamental to the future of Petrobras, because its main objective is not to pay debts, it is to make feasible the level of future investments. Because the debt has to be paid.
The asset sale program faces strong opposition, especially among unions in the ...
There is a very strong ideological reaction against the asset sales and partnerships program. But this sale began in time Grace (former president of Petrobras Graça Foster), in the time of the PT. They sold oil fields in production. The ideological inspiration of the discussion is evident.
What alternative exists for the sale of assets?
This program is not an alternative, it is not a choice. It is a necessity, we need this program. We did stretching the debt profile. We swapped old debt for new debt, but that does not change the size of the debt.
See too
The Court of Auditors of the Union (TCU) has suspended the company's asset sales program demanding changes ...
The TCU wants to improve the features of our program to better suit constitutional principles. And the TCU has an old divergence regarding the decree that gave Petrobras a special regime to carry out its purchases.
What are the main changes required by the TCU?
We send invitations to all possible interested parties that may fit the requirements of the project, but we do not make a public announcement. The TCU thinks that it does not agree with the principles of the publicity. We will follow the guidance of the Court, continue to choose, but we will give publicity.
Will these changes in procedures be retroactive to business already in progress?
There were five operations that were well advanced that we were able to continue, although two were not completed by injunctions (sale of the Green Turtle and Bauna fields and fields in the Gulf of Mexico). It has projects in advanced stage within the previous systematics, a third set of very preliminary transactions. For those in an advanced stage, we do not know what TCU's orientation will be. Ministers will decide Wednesday. It is important to make sure that the process is not attacked in the future. Ideally, the matter should be set as soon as possible.
Is the sale of control of Petrobras Distribuidora (BR) within the list of projects awaiting TCU's decision?
BR is in the process, and it has a court injunction as well. If we have to start negotiations again, the injunction will fall for lack of object.
Can such a delay in the sale of assets drive away potential stakeholders?
Yes you can. Some already know Brazil and understand these comings and goings. Those who do not know are more scared. There was no formal withdrawal, but one of the interested companies has already demobilized the team.
Was it the case of the Australian Karoon, who was negotiating the purchase of the Green Turtle and Bauna fields?
I can not comment on specific cases.
What is plan B for this year if it delays the sale of assets?
We can not fail to pay our debts. Therefore, we would have to make adjustments to the other three variables, which are the policy of prices (of fuels), investments and costs.
What does it mean to fiddle with pricing policy?
One can make the decision to enlarge the margin a little. But this is theoretically. From a practical point of view, it runs the risk of losing market share. Space we have in investments and in costs. In a situation like this, from the point of view of the ease of promoting adjustment, it is in investments.
So you may have to cut back on investments this year?
It is a possibility that we will have to look closely if we can not sell assets. This year's investment forecast was $ 19.2 billion. The divestment program is important for us to continue to be able to have production in the future. It is not choice, it is necessity.
And the Brazilian Securities and Exchange Commission (CVM) questioning the use of hedge in its balance sheets?
There has been a discussion since 2013 about the use of exports to eliminate the risk of exchange variation, which in our case is ours. The CVM's technical body requested the republication of the balance sheet, but then suspended the decision, pending the final position of the CVM, which is given by its board. We have security of our criteria, and they are not questioned outside the country.
What if I have to pay dividends?
The company would love to pay back dividends as soon as possible. It is our wish to treat our shareholders very well. Now, with debt of this size, paying dividends in a situation where the company might not pay them is a rather complex aspect of this discussion.
Petrobras has invited foreign companies to Comperj works that have problems in their countries of origin. But he did not invite Brazilians ...
For the works of the Natural Gas Processing Unit, we invite foreign companies, but also some Brazilian companies. It is a large work, we look at the universe of companies that could do this. We do not invite those who have high Degree of Integrity Risk, the GRI. If, at the time of the choice, foreigners have high GRI, they will be left out. But being a foreigner is no problem, because it creates jobs and wealth in the country.
How do you analyze the change in local content requirements proposed by the government?
It's an important breakthrough. It has a very large rationalization, instead of 90 items, it has, in case of development of production, three items. From the point of view of what Brazilian industry can deliver, it did not change anything, it was 25% of the total.
Have you noticed the interest of foreign investors in investing in the Brazilian pre-salt?
I was at an event in Houston last week and I saw the great interest in the pre-salt. We have done a job to show that, in relation to Lava-Jet, Petrobras was a victim. Who benefited was a small number of company executives, a group of contractors and a group of bad politicians. In relation to the interest in Brazil, it is total. The areas of exploration that cause greater interest are the American shale gas and the Brazilian pre-salt. The changes that the government has introduced in regulation have increased interest.
Will Petrobras participate in the three auctions planned for this year (one in the post-salt and two in the pre-salt?)
Let's look, yes, what we are interested in. Remembering that we have developed great knowledge about the pre-salt. We have drilled more than 200 wells. There are several things that will interest us, and we have the right of first refusal. Indebtedness may prevent us from participating in all that we think is relevant, but it will not stop us from participating.
What does it take for Petrobras to re-negotiate with a contractor involved in the Lava-Jet?
We need the leniency agreement to be recognized by the authorities, by the institutions of the Brazilian State. Then we can go back to working with these companies.
(20min delay)