Brazilian state-owned oil and gas group Petrobras has approved the start of exclusive negotiations with Pampa Energy for the sale of its controlling stake in Petrobras Argentina, as part of its plan to cut its massive debt and to raise capital to continue its core investments in Brazil.
Petrobras is one of the largest oil and gas producers in Argentina and is active throughout the whole value chain, including refining, petrochemicals and even power generation. Pampa Energia is the largest integrated power group in Argentina, accounting for around 8% of the country's power generation. The company also owns Transener, the operator of the largest high-tension power transmission line in the country, and has a stake in the largest power distributor, Edenor. The transaction would be subject to the approval of Petrobras' board and by the market regulators.
In addition, Petrobras' board has approved the start of a competitive process to sell exploration rights in Brazil.