Brazil’s largest independent investment bank Banco BTG Pactual SA may keep its stake in Petrobras Oil and Gas BV (Petrobras Africa) to avoid having to book a loss in a potential sale, a source said.
In June, it was reported that a consortium led by oil trader Vitol had entered exclusive talks to acquire PetroAfrica, as the company is known, in a bid estimated to be worth up to $2.5 billion. State oil company Petroleo Brasileiro SA, which owns 50% of the venture, would be the lead seller in such a deal but BTG’s 40% stake and Helios Investment Partners’ 10% would also be candidates for sale.
If PetroAfrica were sold at Vitol’s proposed price, BTG would have to book a loss, however, as the bank paid $1.5 billion for its initial 50% stake acquired in 2013, according to the source.
Although BTG had previously decided in favor of selling the stake, the bank now believes that PetroAfrica, which participates in two deepwater oil exploration blocks off the coast of Nigeria, will start to generate a stable cash flow bringing regular dividends to the bank soon. BTG would however still be willing to sell if Vitol were to raise its bid, the source added.