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Petrobras (PBR) Ends Sale of Mangue Seco 3 & 4 Wind Farms

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PetroleoBrasileiro S.A. or Petrobras PBR recently concluded the divestment of its Mangue Seco 3 and Mangue Seco 4 wind farms.Per management, the deal is in sync with its strategy to cut costs and improve capital allocation.

In January 2021, Petrobras signed a contract to divest its jointly-owned Mangue Seco 3 and 4 projects to V2I Transmissao de EnergiaEletrica. The farms’ ownership comprises 51% stake held by WobbenWindpower and 49% by the company.

Upon fulfilling all the necessary conditions, Petrobras was paid R$78.2 million to draw the transaction to a close. The amount disbursed to the company upon completing the divestment supplements its earlier received sum of R$ 22.5 million at the time of inking the sale deal, thereby scaling the total to R$100.7 million.

The Eólicas Mangue Seco 3 and Mangue Seco 4 wind farms, each of which owns and operates a wind facility with a respective capacity of 52 megawatt (MW) and 26 MW, are located in Guamaré in the state of Rio Grande do Norte. The farms run by Mangue Seco 3 and 4 are included in the group of four wind farms, namely Mangue Seco 1, Mangue Seco 2, Mangue Seco 3 and Mangue Seco 4 and together these farms constitute a 104 MW wind power complex.

Earlier this year, Petrobras inked a deal to sell its entire 49% interest in the wind farm EólicaMangue Seco 1 — Geradora e Comercializadora de EnergiaElétrica S.A. to Vinci InfraestruturaGestora de Recursos Ltda.’s subsidiary V2I Transmissão de EnergiaElétrica S.A. Per the terms of the deal, the buyer will make full payment of R$42.5 million to the seller.

Also, Petrobras signed a pact to divest its entire 51% ownership in the wind farm EólicaMangue Seco 2 — Geradora e Comercializadora de EnergiaElétrica S.A. to Fundo de InvestimentoemParticipaçõesMultiestratégiaPirineus (FIP Pirineus). According to this agreement, the buyer will make a payment of R$32.97 million to the seller in a single installment, contingent on regulatory approvals.

On the production front, Petrobrasrecently announced that it churned out a record output of S-10 low sulfur diesel in March, reaching 416 thousand barrels per day (bpd). This represents a 2% rise from the previous milestone set last October.

Also, for March 2021, Petrobras registered total diesel sales volume of 791 thousand bpd, reflecting a 35% surge from the level achieved in the same month last year. Moreover, Petrobras' refining park hit a utilization factor of 80.2% last month despite three refineries being mandatorily shut down for maintenance, thereby contributing significantly to the above favorable results.

Company Profile

Petrobras is the largest integrated energy firm in Brazil and one of the biggest in Latin America. The company’s activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks. The activities also include refining, processing, trading and transportation of oil and oil products, natural gas and other fluid hydrocarbons besides other energy-related operations.

Zacks Rank & Key Picks

Petrobras currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are Matador Resources Company MTDR, Diamondback Energy, Inc. FANG and Devon Energy Corporation DVN, each presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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