Starboard snaps up Petrobras oil assets for a second time

Source: Latin Lawyer
By: Emily Darby

Campos Mello Advogados has helped the subsidiary of Brazilian private equity group Starboard Asset purchase a cluster of eight oil fields from state-owned energy company Petrobras for US$94 million.

Petrobras enlisted Machado Meyer Advogados for the transaction, which was signed on 21 August.

Starboard’s energy subsidiary 3R Petroleum made the purchase using a special purpose vehicle, SPE Rio Ventura. The buyer paid US$4 million on signing, with an additional US$31 million to be paid on closing. The remaining US$59 million will be paid over the next three years, with that payment dependent on the assets meeting certain targets set out in the sales agreement.

In the deal, 3R used the special purpose entity to purchase Petrobras’s entire stake in the Rio Ventura oil field cluster, which is in the north-eastern state of Bahia.

The cluster contains eight onshore fields in Bahia’s Catu, Mata de São João and Pojuca municipalities, among others. The facilities produced an average of 1,050 barrels of oil per day in the first half of 2020.

With the purchase, Starboard expands its portfolio of onshore fields in Brazil. The local asset management group also profits from Petrobras’ widescale divestment programme. The government-run oil company has undergone a series of divestments to increase liquidity in a bid to trim its US$80 billion debt pile.

Petrobras recently divested its shares in another oil field cluster to local counterpart Karavan for US$155 million, just weeks after former subsidiary Petrobras Distribuidora sold its entire stake in Brazilian asphalt company Stratura Asfaltos. The transactions followed last year’s landmark sale of its gas pipeline company to French counterpart Engie, a deal that carried an eye-catching price tag of US$8.6 billion.

This is the second time Starboard has snapped up assets from Petrobras’ divestment programme. In May, it spent US$191 million buying a cluster of former Petrobras onshore and offshore fields in the north-eastern Rio Grande do Norte region. That deal marked its entry into the onshore oil market. At the time, Starboard set up its 3R subsidiary with the purpose of operating its expanding portfolio of oil assets.

Starboard is a subsidiary of Brazilian insolvency advisory company Starboard Restructuring Partners. The group, which provides financial advice to companies undergoing corporate reorganisations, has helped its clients restructure around US$15 billion worth of debt. Its 3R Petroleum business now operates four clusters of oil and gas fields based in the Rio Grande do Norte, Bahia and Ceará regions of Brazil.

Counsel to 3R Petroleum
Campos Mello Advogados
Partners Marcus Bitencourt and David Meiler and associate Bárbara Bittencourt

Counsel to Petrobras
Machado Meyer Advogados
Partners Arthur Bardawil Penteado, Daniel Szyfman and Decio Pio Borges De Castro, and associates Antonio Carlos Amorim Castello Branco, Fernando Xavier and Raphael Barboza Correia