Petrobras reportedly in talks to buy Exxon's South American assets

Last Update: 10/29/2007 8:05 AM

SAO PAULO (Dow Jones)--Brazil's state-run oil company Petroleo Brasileiro SA (PBR), or Petrobras, is in advanced talks to buy the South American assets of ExxonMobil Corp. (XOM), local magazine Veja reported over the weekend.

According to the report, Petrobras will acquire Esso brand assets in Brazil, Argentina, Chile, Uruguay and Paraguay for approximately $900 million.

Earlier this month, a Petrobras director said that the company wasn't negotiating the purchase of ExxonMobil's (XOM) South American assets.

"We are analyzing our growth options in South America, but there are no ongoing negotiations with Exxon," International Director Nestor Cervero said at a news conference at the Lisbon Energy Forum.

According to others recent reports, Petrobras is considering the formation of a consortium for the purchase to circumvent antitrust issues. A possible partner in such a consortium could be Brazilian fuel and petrochemicals company Ultrapar Participacoes SA (UGP), or Ultra.

Ultra confirmed in September its interest in acquiring Exxon's Brazilian assets, but alone may not have the financial capacity to pull off such a deal.

In March, Ultra became Brazil's second-biggest distributor when it bought the service stations of local oil company Ipiranga (PTIP4.BR) in the country's south and southeast.

-By Rogerio Jelmayer, Dow Jones Newswires; 5511-3145-1480; rogerio.jelmayer@dowjones.com

(END) Dow Jones Newswires

October 29, 2007 08:05 ET (12:05 GMT)

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