By Rogerio Jelmayer
SÃO PAULO -- Brazilian oil company Petróleo Brasileiro SA, or Petrobras, completed a flurry of asset sales at year-end, but still fell short of its $15.1 billion divestment target for the 2015-2016 period.
The state-controlled company is likely to face difficulties on this front next year as well, but the company's management has made progress in restoring investor confidence and cutting the firm's huge debt, analysts say.
Petrobras said Thursday it has sold assets with a total value of $13.6 billion last year and this year. The company attributed the near miss to its compliance with a court order that blocked the sale of various oil fields in Brazil.
In light of the missed target, Petrobras said it decided to raise its divestment target for the 2017-2018 period to $21 billion from $19.5 billion previously. The planned sales are part of the company's effort to cut its $123 billion in debt.
"The question will be if Petrobras will be able to find buyers," said Pedro Galdi, an investment analyst at Upside Investor, based in São Paulo. "The scenario will remain challenging because of the uncertainty surrounding the global economy and oil prices."
Petrobras's preferred shares were down 0.1% at 14.66 reais ($4.47) midday Thursday. Mr. Galdi said he expects the share price to reach 20 reais at the end of 2017.
Petrobras completed $752 million in asset sales this week, including a Japanese refinery bought by Taiyo Oil Co. for $165 million that was announced Thursday. The Brazilian company said Wednesday it will sell its stake in sugar and ethanol producer Guarani SA to France's Tereos Internacional for $202 million and on the same day announced the sale of some petrochemical assets to Mexico's Alpek for $385 million.
Petrobras last week signed a strategic alliance agreement with France's Total SA, which will include some asset sales, such as oil concessions, that the Brazilian company said will bring in another $1.6 billion in the next two months.
The sales, and recent management changes, are a response to a series of problems that left the company among the most-leveraged oil producers in the world. The government of former President Dilma Rousseff forced the state-controlled company to sell gasoline below cost for several years leading up to her 2014 re-election campaign as part of an effort to keep inflation down.
Ms. Rousseff was ousted after an impeachment process earlier this year for violating budget laws. Her approval ratings had dropped to around 10% before leaving office, partly because of a mammoth anticorruption investigation of bid-rigging and bribery at Petrobras. Prosecutors have said the scheme cost the oil company about $13 billion.
Petrobras' new management team is led by Chief Executive Officer Pedro Parente , who took over the top job in June. Mr. Parente is working to regain the confidence of investors and show that the company is now being managed by market-friendly professionals, and analysts say they are encouraged by what they have seen so far.
"Petrobras shares are now much more linked with oil prices than to domestic political factors," said Marco Saravalle, an equity analyst at investment house at XP Investimentos, which oversees a portfolio of 50 billion reais ($15.3 billion) in equities and fixed-income assets for 200,000 clients.
Write to Rogerio Jelmayer at email@example.com
(END) Dow Jones NewswiresDecember 29, 2016 11:28 ET (16:28 GMT)
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