Brazil’s Vale to Sell Stakes in Oil, Gas Concession to Statoil

From NZ Week

Brazil’s mining giant Vale announced Wednesday it would sell its stakes in an oil and gas exploration partnership with Statoil Brazil for 40 million U.S. dollars in cash.

The world’s leading iron ore producer said it has clinched a deal with Statoil Brasil, the Brazilian branch of Norwegian energy company Statoil, to sell its 25 percent stakes in the BM-ES-22A concession in the Espirito Santo Basin, off Brazil’s southeastern coast.

The sale would “exempt Vale from committed expenditures of approximately 80 million dollars until the end of 2013,” the company said.

The transaction, which is still subject to contractual and regulatory conditions and approvals before closing, was part of the strategy of getting rid of assets unrelated to main activities, Vale added.

The latest move came less a month after Vale announced a cut of its investment budget for 2013 by 24 percent to 16.3 billion dollars at the start of this month.

The prospects of a moderate expansion of the global demand for minerals and metals over the medium-term “do require a strict discipline in capital allocation and a stronger focus on maximizing efficiency and minimizing costs,” Vale was quoted by reports as saying.

In October, Vale reported a 66.2 percent drop in the third-quarter net profit, citing lower international prices for its major products such as iron, nickel and copper due to the global economic slowdown.

It said net profits totaled 1.66 billion dollars during the period, down from over 4.93 billion dollars for the same period last year and 2.66 billion dollars in the second quarter of 2012.

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