The seven investment banks hired by Petrobras are Morgan Stanley, JPMorgan Chase, Goldman Sachs Group, Itau Unibanco, XP, Bank of America and Citgroup.

According to media reports, Petrobras will sell 37.5 percent interest in its fuel distribution unit Petrobras Distribuidora (BR). The sale could help Petrobras raise around $2.99 billion.

However, it is not clear whether Petrobras will sell the entire 37.5 percent at once or in fractions.

The stake sale in Petrobras Distribuidora is part of the oil company’s plan to divest various assets to reduce its debt. In the company’s 2020 to 2024 business plan released by the company in December 2019, Petrobras revealed that it is looking to sell assets worth $20 to $30 billion in the next five years.

Earlier this month, Petrobras exited the African continent by selling its 50 percent stake in Petrobras Oil & Gas PV (POGPV) to Petrovida Holding in a deal worth $1.5 billion. Through POGPV, Petrobras had control over the Nigerian oil fields of Egina and Agbami.

In October 2018, the Brazilian oil giant entered into a partnership with Petrovida Holding, which is now fully under the control of Africa Oil.

The oil company has also put up its entire stake in the deepwater concessions Golfinho Cluster and Camarupim Cluster, located in the Espirito Santo Basin up for sale.

While Golfinho Cluster is located at a water depth between 1,300 metre and 2,200 metre, Camarupim Cluster is located in a water depth between 100 metre and 1,050 metre.

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Petrobras’ decision to cut costs and divest its non-core assets will contribute to the increase in its equity value.

Besides breaking the news of an estimated increase in equity value, Petrobras also revealed that capital expenditure of around $75 billion will be spent in Brazil’s offshore pre-salt formation, with a focus on its recently acquired Buzios oilfields. The company further specified that around 30 percent of the $75 billion will be allocated to the Buzios oilfields.

During the presentation, Petrobras also revealed that it expects to make around $1 billion in gains due to increased sales of bunker fuels. Recently, global regulators reduced the level of sulphur level allowed in bunker fuel. Petrobras, along with Brazil welcomed the news as crude oil in Brazil is naturally low in sulphur.

As a part of its five-year divestment plan, Petrobras could sell assets worth $30 billion. The assets which Petrobras is planning to sell include eight refineries across Brazil.

Petrobras also revealed that it is yet to decide on the future of its assets in Bolivia, as well as its stake in petrochemical firm Braskem, and its remaining stake in fuel distribution unit BR Distribuidora.

According to a report published by Rystad Energy, Petrobras may soon become the world’s largest oil producer among publicly listed companies by 2030.

The report revealed that Petrobras jumped two places from fifth to third in the current year to become the third-largest oil producer in the world with an output of 2.2 million barrels per day.

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