Petroleo Brasileiro S.A. - Petrobras (PBR)

[eastunder]

Petrobras struggling to sell Gulf of Mexico assets -sources
12:15 AM ET, 12/05/2012 - Reuters

* Executive says company has had great difficulty selling gulf assets

* Discards plans to sell stake in Gulf of Mexico assets to a single JV partner

* Now seeking partners for individual assets, packages of assets in the Gulf (Adds background)

By Michael Erman and Leila Coimbra

NEW YORK/RIO DE JANEIRO, Dec 4 (Reuters) - Brazil's state-controlled oil company Petrobras is having trouble selling more than $4 billion of offshore oil exploration and production assets in the U.S. Gulf of Mexico, sources familiar with the matter said.

The Brazilian oil company has discarded plans to sell a stake in its entire Gulf of Mexico holdings to a single partner and has begun seeking partners for individual assets and packages of the oil blocks there, the four sources said.

The people said the new strategy could open up the universe of potential buyers there.

Separately, a Petrobras executive confirmed that the company has had great difficulty in selling the assets in the Gulf but declined to elaborate.

The sources and the executive spoke on condition of anonymity because the process is still private.

Petrobras launched the auction as part of an asset sale program to support its ambitious expansion plan and Brazil's aim of becoming one of the world's top oil-producing countries by 2020.

The company hopes to sell $14.8 billion of assets this year as soaring costs, falling production and rising fuel imports have crimped Petrobras's ability to pay for a $237 billion five-year expansion plan, the world's largest corporate investment program. It posted its first quarterly loss in 13 years in the second quarter.

In May, Petrobras Chief Financial Officer Almir Barbassa called the Gulf of Mexico assets "probably the most important" piece of the company's sale program.

Petrobras has about 190 exploration blocks under lease from the U.S. government in the Gulf of Mexico. In the middle of the last decade it was the largest single buyer of deepwater blocks in the area. (Additional reporting by Jeb Blount in Rio De Janeiro; Editing by Edmund Klamann)