Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados has helped Brazilian state-owned energy company Petrobras sell a minority stake in its gas distribution subsidiary to Japanese commercial conglomerate Mitsui for 1.9 billion reais (US$490 million) as part of its multibillion-dollar divestment programme.
Pinheiro Neto Advogados represented Mitsui. London-based firm Morrison & Foerster LLP is also thought to have advised the Japanese company, but this could not be confirmed prior to publication. The deal closed on 23 October.
Mitsui's acquisition of a 49 per cent stake in Petrobras Gás, which trades under the name Gaspetro, expands the Japanese company's gas distribution network to 19 of Brazil's 26 states. The deal is part of Petrobras' multibillion-dollar global divestment programme led by former Banco do Brasil CEO Aldemir Bendine, which calls for asset sales worth US$58 billion by the end of 2018 and budgets cuts totalling US$130 billion by the end of 2020. Mattos Filho is advising Petrobras on the entire restructuring scheme.
Petrobras wants to retain control of vast pre-salt oil and gas deposits, which lie at the bottom of the Atlantic Ocean under two kilometres of salt and are extremely expensive to develop. On average, the hydrocarbon-rich geological formations will produce 10 times the daily output of conventional offshore oil blocks, making the deposits profitable if oil prices rise in line with the company's projections to between US$60 and US$70 dollars per barrel over the next five years.
But Petrobras's focus on its pre-salt portfolio and upstream assets comes at the expense of more downstream-orientated businesses like Gaspetro, which will only receive 12.8 per cent of the company's budget over the next five years. Meanwhile, exploration and production will use 83 per cent of all available funding.
Despite plans to keep upstream assets, Petrobras's substantial debt, estimated conservatively to be in excess of US$110 billion, means it must sell producing assets as well. In April, the company hired Pérez Alati, Grondona, Benites, Arntsen & Martínez de Hoz (h) to sell 26 onshore blocks already producing some 15,000 barrels per day in Argentina for US$100 million.
The drop in oil prices and budgetary overspend are largely responsible for Petrobras' financial problems. However, its alleged role in the cash-for-contracts corruption scandal has also hurt its finances and made it more difficult to obtain favourable rates on the debt markets.
Meanwhile, plans to raise funds through an initial public offering of BR Distribuidora, Petrobras's main distributor of petroleum derivatives and biofuels, have stalled amid poor market conditions. Petrobras announced in a securities filing on 15 October that it was now looking for a partner for the business, which is worth some US$10 billion.
Counsel to Petrobras
Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados - Partners Giovani Loss and Claudio Oksenberg and associates Thais Gasparian, Bruno Chedid, Felipe Feres, Larissa Weyll, Marcelo Tourinho, Lais Penna, Daniela Adler and Frederico Donas
Counsel to Mitsui
Pinheiro Neto Advogados - Partners Ricardo Vieira Coelho, Marcello Lobo, José Alexandre Buaiz Neto, Werner Grau Neto, Marcello Alfredo Bernardes and Emir Nunes de Oliveira Neto, and associates Rodrigo Tostes, Felipe Cozer, Marco Aurelio Martins Barbosa, Laura Castello Branco Araújo, Bruno de Morais Piloto, Alessandra Fonseca de Morais Silva, Rafael Breves de Toledo, Fernanda Suellen Bortolini and Caio Bernardes Vianna