Petrobras looking at ENI stake in Galp

BRAZIL’S state-run oil company Petrobras has said it is considering buying Italian group ENI’s 33 per cent stake in Portugal’s Galp, expanding its deepwater exploration globally.

The sale, valued at €3.8bn (£3.2bn) based on Galp’s market capitalisation, would help ENI reduce its debt and keep dividends flowing to shareholders while strengthening ties between Petrobras and Galp.

Petrobras and Galp are already partners in some oil exploration deals in Brazil, including in the Lula and Cernambi fields, which hold a combined 8.3bn barrels of oil equivalent in recoverable reserves.

ENI paid €900m for its Galp stake in 2000.

Eni confirmed it is mulling options including Petrobras for its Galp stake, but said no decision had been made.

Petrobras said in a securities filing that no binding agreement had been reached and that it routinely looks for investments in Brazil and abroad.

“Petrobras confirms it is studying the possibility of a potential transaction with ENI, but until now no analysis has been finished, just as there is no binding agreement between the parties,” Petrobras said in the filing.

Galp declined to comment on a possible deal with Petrobras.