Vinson & Elkins advised China National Petroleum Corp. (CNPC), in its acquisition of Petroleo Brasileiro SA’s assets in Peru for $2.6 billion. A copy of CNPC’s press release is below.
The V&E team was led by partner Rob Patterson (energy transactions/projects), with assistance from partner Jay Kolb (energy transactions/projects). The team was supported by Beijing-based associates Tom Calvert, Yin Tingting and Jill Sheng (all energy transactions/projects).
PetroChina Acquires Petrobras Assets in Peru
13 November, 2013, Beijing – PetroChina Company Limited ("PetroChina", or the “Company”, HKSE: 0857; NYSE: PTR; SSE: 601857) today announced that CNPC E&D Holdings Cooperatief U.A. (the “CNPC Holdings”) and CNODC International Holding Ltd. (the “CNODC International”) (collectively, the “Purchasers”), both being indirect subsidiaries of the Company, entered into an agreement with Petrobras International Braspetro B.V. (“PIB”) and Petrobras De Valores Internacional De Espana S.L. (“PVIE”) (collectively, the “Sellers”) to acquire the entire shares of Petrobras Energia Peru S.A. (the “Target Company”) from the Sellers for a consideration of approximately US$2.6 billion.
The Target Company possesses three blocks of oil and gas fields in Peru, of which the Target Company holds 100% interest in two blocks and a 46.16% interest in the third block. On the basis of the equity interests held by the Target Company, the three blocks have sizeable recoverable reserves, and the current output is approximately 0.8 million tons oil equivalent output per year.
The completion of the acquisition is subject to relevant government approval and the fulfillment of other conditions.
Peru is among the countries in Latin America that have a relatively good investment environment. The three target blocks are all quality oil properties in Peru with achievable profit potential. The acquisition of the assets will help to expand the scale of PetroChina’s oil and gas cooperation in Latin America, and drive the sustainable development of PetroChina’s overseas business.
Information about the Target Company
The Target Company is an indirect wholly-owned subsidiary of Petróleo Brasileiro S.A. (“Petrobras”) which is primarily engaged in the exploration and production of oil and gas in Peru. The shareholders of the Target Company are PIB (holding 0.21% of the equity interest) and PVIE (holding 99.79% of the equity interest). According to its 2012 audited financial statements, as at 31 December 2012 the Target Company’s total assets amounted to approximately US$1.42 billion, with net assets of approximately US$660 million. Its revenue from core businesses in 2012 was US$600 million, with net profit of US$102 million.
Information about the Purchasers
CNPC Holdings and CNODC International are both overseas wholly-owned subsidiaries of CNPC Exploration and Development Company Limited ( 中油勘探開發有限公司, the “CNPC E&D”). CNPC E&D is a subsidiary of the Company and a joint venture company held as to 50% by the Company and as to 50% by China National Oil and Gas Exploration and Development Corporation, which is a wholly owned subsidiary of China National Petroleum Corporation, the controlling shareholder of the Company. CNPC E&D is principally engaged in the exploration, development, production, transmission and marketing of crude oil and natural gas. It has operations in Kazakhstan, Venezuela, Indonesia, Peru, Algeria, Azerbaijan, Chad, Canada, the PRC, Ecuador, Niger and Oman.
Information about the Sellers
PIB and PVIE are both wholly-owned subsidiaries of Petrobras. Petrobras is a national petroleum company primarily engaged in the oil business with integrated upstream and downstream businesses that are operated trans-nationally. The Brazil federal government is the controlling shareholder of Petrobras.