BG Group sells Comgas stake in a £1bn deal
GAS and oil producer BG Group said yesterday it had agreed to sell its Brazil gas distribution business Comgas to Cosan for $1.8bn (£1.1bn) as it unveiled soaring first quarter profits on the back of higher oil prices and production.
BG is selling its 60 per cent stake in Comgas as part of a $5bn disposal programme to channel resources from downstream distribution and power generation assets into more lucrative upstream oil and gas production projects.
The cash raised will ease fears about BG’s ability to meet the cost of bringing big fields in Brazil and Australia onstream.
The announcement of deal talks last month hit Cosan shares as investors questioned what synergies Brazil’s largest sugar and ethanol producer could achieve from a deal, and its impact on Cosan’s efforts to improve its debt rating.
The sale price implies a premium of around 11 per cent to Comgas’s closing share price on Wednesday. Royal Dutch Shell owns another 18.1 per cent.
Comgas is the largest distributor of piped natural gas in Brazil with 4,000 kilometres of pipelines that deliver gas to customers in 57 cities.
Meanwhile BG Group reported a 55 per cent rise in underlying net profits to $1.27bn in its first trading quarter, broadly in line with analysts’ forecasts. Chief executive Sir Frank Chapman said: “In addition to project delivery, the group continued to enjoy exploration and appraisal success, maintaining our position as one of the industry’s leading explorers.”