Petrobras to start receiving offers for terrestrial fiber network

Brazil’s Petrobras is starting the process of collecting binding offers for the sale of its national terrestrial fiber network, a process that had been announced on October 28.

In a statement on Wednesday, the oil giant said that "qualified potential buyers" will receive an invitation letter with instructions on the next steps, including guidelines for conducting due diligence and for submitting binding proposals.

EY is advising Petrobras on the sale. The professional services group was responsible for receiving expressions of interest and qualifying the companies eligible to bid.

The fiber network is distributed along oil and gas pipelines from the country's northeast region down to the south, with a separate route in the north.

It comprises buried cables, most of which have 36 optical fibers, packaged in high-density polyethylene tubes (HDPE) that Petrobras claims offer "greater protection and maintenance versatility."

BNamericas detailed the entire onshore grid, as well as how the sale will be divided into four regional blocks, here.

Due to the length and distribution of the network, and to the fact that the cables are already deployed and "protected," Petrobras' onshore fiber could be an interesting asset to wholesale telecom providers.

That applies particularly to neutral fiber network companies and their respective investors – such as CDPQ, BTG Pactual and IHS Towers.

DIVESTMENTS

The launch of the bidding phase for the sale of the network comes less than four days before the change of government – and also in the management of the company itself.

Senator Jean-Paul Prates, from incoming president Luiz Inácio Lula da Silva's Workers Party (PT), is the strongest candidate to lead Petrobras under the next government. 

The president-elect, who takes office on Sunday, is yet to announce his picks for the heads of the state company and for the mines and energy ministry. It is unclear how the new government will handle Petrobras' overall divestment policy, but the sale of refineries and natural gas assets is likely to be halted.

"There's been no discussion about what has already been sold, but what should be done going forward. There will be no generalized repurchase policy," a source close to Lula and with knowledge of the matter, speaking on condition of anonymity, told BNamericas in November.

"The idea is to stop divestments in Petrobras' refining and natural gas area," the source added.

The company said that the fiber grid sale is in line with its internal rules and with the strategy for divestment of assets of federally controlled firms, provided for in a decree signed in 2017 during the Michel Temer government.

"This operation is in line with the portfolio optimization strategy and the improvement of the company's capital allocation, aiming at maximizing value and offering greater returns to society," Petrobras said in the release.