SAO PAULO (Reuters) - State-run Brazilian oil company Petroleo Brasileiro SA (Petrobras) said on Tuesday it was suspending major asset sales after a Supreme Court justice ruled that Congress must approval any privatizations.
Petrobras said it would suspend the sale of certain refineries, its gas pipeline company Transportadora Associada de Gas (TAG) and the Araucaria fertilizer factory.
Justice Ricardo Lewandowski said last week that the Brazilian Congress must approve any sales of publicly held shares in companies or their subsidiaries, casting doubt on planned divestitures by Petrobras as well as state utility Centrais Eletricas Brasileiras. The full court must still decide on the matter.
Petrobras, the most indebted oil major, is working to sell $21 billion in assets over two years. The company sold $4.5 billion worth of assets last year and committed to selling an additional $3 billion this year.
Preferred shares of Petrobras edged up 0.17 percent to close at 17.50 reais, as the benchmark Bovespa stock index gained 1.14 percent.
The shares have gained 8.9 percent this year but gains were much higher before May, when an uproar over higher diesel fuel prices triggered a truckers’ protest that paralyzed Brazil’s economy and resulted in the departure of well-regarded former Chief Executive Pedro Parente.
The sale process of gas pipeline company TAG is in its final stages. Petrobras is discussing contracts with France’s Engie SA and had been expected to submit the deal for rebids by the other two interested consortia, led by Australia’s Macquarie Group Ltd and EIG Global Energy Partners LLC with United Arab Emirates’ sovereign wealth fund Mubadala Development Co.
The deal would bring more than $7 billion to the oil company’s coffers.
Efforts to sell the Petrobras refineries were just beginning and had drawn lukewarm investor interest due to potential changes in fuel pricing policies.
Reporting by Carolina Mandl; Editing by Susan Thomas and Lisa Shumaker