Brazilian state-run oil company Petrobras announced that China’s CNOOC is looking to acquire an additional 5% stake in production rights for Buzios, one of the largest oil-producing fields in Brazil, for $2.08bn. In 2019, Petrobras acquired 90% of the rights to explore and produce oil at the field during a transfer of rights auction. 5% of the field was bought by Chinese oil companies CNOOC and CNODC. Petrobras said that the 2019 contract also gave CNOOC and CNODC the option to acquire an additional stake in Buzios. The deal still requires approval from Brazil’s antitrust watchdog Cade, oil regulator ANP and the Mines and Energy Ministry.

An additional optional acquisition for the Chinese company’s stake in Buzios was established in the previous contract, Petrobras said. The deal still requires approval from three Brazilian entities. “We remain ‘neutral’ on Petrobras as we continue to see better risk reward elsewhere in our global oil coverage…It could contribute to some additional reduction in the company’s gross debt, but caution that the impact on production remains unknown,” said Goldman Sachs.

Petrobras’ USD bonds were slightly up with its 6.25% 2024s up 0.83 to 112.833, yielding 0.94% and its 6.75% 2041s up 1.29 to 115.195, yielding 5.47%. CNOOC´s USD bonds were trading stable with its 2.875% 2029s trading at 103.49, yielding 2.38%.

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