Rio de Janeiro, October 23, 2015 - Petróleo Brasileiro S.A. - Petrobras hereby responds to Official Letter 425/2015/CVM/SEP/GEA-1 requesting clarifications, as transcribed below:
Official Letter 425/2015/CVM/SEP/GEA-1
'We refer to the news item published today in the Empresas (Companies) section of Valor Econômico newspaper, entitled Petrobras já tem proposta de compra de fatia da BR (Petrobras has already received a proposal to acquire part of BR), which states, among other matters, that:
Petrobras' Board of Directors is meeting tomorrow to evaluate, among other issues, the first proposal to acquire up to 25% of BR Distribuidora. One informed source, who preferred not to reveal the name of the interested buyer, said there is a chance that the deal will move ahead and be concluded by the end of this year. Following the entry of the strategic partner, in the future the company will hold an IPO for each business linked to the gas station chain.
If concluded, the transaction will strengthen Petrobras' cash position and leverage the company's asset sale program. The sale of a stake in BR gains even more importance now that the Bahia state government and Termogás have filed suit against Petrobras' main ongoing transaction - the sale of 49% of Gaspetro to Mitsui - thereby jeopardizing a deal worth around R$2 billion.
Petrobras is also expected to announce another two asset sales by the end of the year: the South American gas station chain (excluding those in Argentina) and one of its oil fields, probably Tartaruga Verde in the post-salt region of the Campos Basin, which is scheduled to begin production in 2017. Valor has discovered that the company is counting on these two transactions to meet its 2015 asset sales target, revised this month from US$3 billion to US$700 million.
Petrobras is still discussing some of the terms of the BR operation, including whether the new partner will have an option to acquire a majority interest in the future. Last week, it announced that its Executive Board had authorized the pursuit of a strategic partner for BR and that the matter would be discussed by the Board of Directors at its next meeting.
According to sources, among other points on tomorrow's extensive agenda is a proposal to amend the company's Bylaws, making around 50 executive managers statutorily responsible for its acts. According to an informed source, however, it is not certain if the issue will be decided at Friday's meeting, or just presented and discussed.
BR Distribuidora's Board of Directors is expected to meet today to appoint a new CEO to replace José Lima de Andrade Neto, who resigned in September. However, this decision may be postponed.
Korn Ferry, a headhunter firm, was hired to select the candidates to head up BR but, according to an informed source, the position's salary ceiling is low by market standards, making it difficult to attract executives from the private sector.
The decision to seek a strategic partner for BR was evaluated by the company some months back but gained momentum after Petrobras decided to delay the distributor's IPO.
According to JP Morgan, as of the entry of a partner and the IPO, 49% of BR Distribuidora will bring Petrobras around US$5 billion.
Given the above, we would like you to confirm if the content of this news item is in fact true and, if so, why such information was not deemed to constitute a material fact.'
Clarification
According to published today (October 23, 2015), as a Material Fact, Petrobras' Board of Directors authorized today the search for strategic partner for its wholly-owned subsidiary Petrobras Distribuidora (BR), as well as approved the postponement, for an undetermined period, of the registration as a publicly-held company and the IPO of this subsidiary.
The search for strategic partner had been announced as an alternative to the BR in the Material Fact published on July 1, 2015.
On the possible sale of other assets, as published on July 29, 2015, Petrobras reaffirms that has a divestment plan of US$ 15.1 billion for the years 2015-2016. This divestment plan includes assets of exploration and production of oil and natural gas supply and gas and energy.
Facts deemed relevant on this topic will be timely communicated to the market.