Petrobras in Talks to Buy Stake in Galp Energia

BRASILIA (Dow Jones), Jan. 14, 2010

Brazilian state energy giant Petroleo Brasileiro is in talks to buy a stake in Portugal's Galp Energia, Mines and Energy Minister Edison Lobao confirmed Wednesday.

"Petrobras and Galp Energia have had conversations, but it's only just a conversation at this time," Lobao said during an event at the Foreign Relations Ministry in Brasilia.

Galp Energia is interested in selling a stake in the company and is eager to have Petrobras' participation, Lobao added.

Last week, reports surfaced that Petrobras was in talks with Italy's Eni SpA to buy Eni's 33.34% stake in Galp Energia. The companies declined to comment on the reports.

Galp Energia would offer Petrobras an entry into the key European refining market. The Portuguese oil company is also a key Petrobras partner in development of recently discovered Brazilian offshore oil deposits.

According to the reports, talks between Petrobras and Eni about the Galp stake had been broken off in 2006, but were relaunched at the end of 2009 and could be concluded this year.

Eni and Portugal's Grupo Amorim, which owns another third in Galp, currently are in a shareholder's pact preventing them from selling their stakes. The pact, however, expires at the end of 2010.

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