Petrobras Continues Wait for Pecom Approval

Argentina's antitrust body, SDC, did not make any decision on the takeover by Brazil's federal energy company Petrobras of Argentine energy giant Perez Companc by Tuesday's deadline, a source from the department told BNamericas.

Petrobras has agreed with Perez Companc, otherwise known as Pecom, to buy 58.6% of the company for US$1bn. Pecom in turn owns 98% of energy company Pecom Energia. Petrobras wanted to complete the deal before last Sunday's presidential elections, fearing that a new government could slow the process.

Outgoing President Eduardo Duhalde opposes the inclusion of Pecom Energia's stake in power transmission company Transener in the deal, because he is against foreign control of a strategic asset such as power transmission. Some reports in the Argentine press said that the antitrust body had approved the deal after Argentina's government and Petrobras reached a verbal agreement about the sale Transener.

Cronista reported that the agreement was for Petrobras to sell Transener by international auction once the company has regained its market value, which will only occur once energy rates and contracts are renegotiated by Argentina's new administration.

Pecom confirmed that it has not received any notification from SDC. "The negotiations are very advanced so there could be a decision at any moment, but there is nothing official yet," Pecom Energia spokesperson Veronica Rivero told BNamericas.

The antitrust authority has no technical problem with the deal but could delay approving the deal once again, Rivero said, adding that with national elections headed for a May 18 second round for the first time in the country's history, the political climate would be bound to influence the negotiations. The second round run-off is between former president Carlos Menem and Santa Cruz province governor Nestor Kirchner, who is backed by Duhalde. The winner of the elections will succeed President Eduardo Duhalde on May 25 for a four-year term.

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