Vale Plans To Sell Its O&G Assets
BRAZIL (Dow Jones Newswires), Dec. 26, 2011
Brazilian miner Vale SA plans to sell off its oil and gas assets to concentrate on its core mining business, Folha de S. Paulo newspaper reported Saturday, without disclosing sources.
The decision by Vale Chief Executive Murilo Ferreira marks a change of direction from the strategy to diversify into energy that had been adopted by former CEO Roger Agnelli, the newspaper said. The company recently announced it is changing its shipping strategy and will sell the large vessels it ordered under Agnelli, preferring to lease ships, Folha said.
Vale holds minority stakes in 18 oil and gas blocks in Brazil's Santos, Espirito Santo, Para-Maranhao and Parnaiba basins. In 2007, it spent $1 billion in purchasing stakes in 9 blocks in a government auction, later doubling its holding via purchases from private companies, Folha said.
In most of the blocks Vale is a partner with state-controlled Petroleo Brasileiro SA (PBR, PETR4.BR), which may have preferential purchase rights if Vale sells its holdings, Folha said.
Agnelli had planned for Vale to produce natural gas for use by its own operations. Ferreira's decision to sell the oil and gas assets, as well as to sell the company's large ships, comes at a time of tighter credit and will free up capital which could allow Vale to make acquisitions in the mining area, according to Folha.
Press officers at Vale's Rio de Janeiro headquarters had no immediate comment on the Folha report when contacted Monday by Dow Jones Newswires.
Copyright (c) 2011 Dow Jones & Company, Inc.
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