Petroleo Brasileiro SA (NYSE:PBR) and its partners commenced production in the pre-salt Libra block on Sunday. The company introduced its Pioneer of Libra FPSO segment that has regular capacity to process up to 4 million cubic meters of gas and 50,000 barrels of oil.
In unrelated news, Petroleo reported that it had filed for an initial public offering for its fuel distribution subsidiary unit named Petrobras Distribuidora S.A. The firm plans to raise nearly $2.3 billion at the high side of the price range. It is looking for a price of up to $6.8 billion for its firm which operates more than 8,000 gas stations, 15 lubricant deposits, 109 fuel stations and 91 fuel storage bases. Citigroup Inc. is expected to be the lead underwriter of the IPO together with seven other banks. In addition, Petrobras Distribuidora is projected to merge with Downstream Participações Ltda in the coming period.
Earlier, IPO plans of Petrobras Distribuidora have been hindered following the heavy load of the invoice receipts that Eletrobras needs to pay it for fuel sales. Petroleo renewed the initial public offering plans in June and has been focusing on lowering capital spending and debts. In August, the company invested $2 billion into its fuel distribution subsidiary firm to support the balance sheet, thus allowing it to attract shareholders for the IPO.
This step came after the government proposed to offer the controlling stake Eletrobras to meet the budget deficit and promote efficiency and competition to the business. Petroleo is the leading Latin American oil & gas integrated firm. The company is entering into different strategic partnerships with oil giants to lead exploration momentum. Petrobras has finalized deals with numerous firms like Royal Dutch Shell plc RDS.A, Statoil ASA STO and TOTAL S.A. TOT.
In the last trading session, the stock price of Petrobras declined more than 3% to close the day at $9.81.