Scotiabank, Citi Hired To Sell Vale's Oil, Gas Assets--Source

Date : 05/17/2012 @ 12:22PM
Source : Dow Jones News
Stock : Vale S.A. American Depositary Shares Each Representing One Common Share (VALE)
Quote : 8.47  0.01 (0.12%) @ 5:59PM

Scotiabank, Citi Hired To Sell Vale's Oil, Gas Assets--Source

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Brazilian mining giant Vale SA (VALE, VALE5.BR) has hired Bank of Nova Scotia (BNS, BNS.T) and Citigroup Inc. (C) to help sell its oil and gas exploration blocks in Brazil, according to a person familiar with the transaction.

Earlier, Bloomberg News cited one person as saying that Vale's oil exploration fields may be worth as much as $1 billion, without divulging the source. A source that Dow Jones Newswires spoke to declined to confirm the $1 billion figure, and wouldn't specify how much the blocks could be worth.

A spokeswoman for Vale couldn't immediately be reached for comment. A spokesman for Citigroup declined comment for this article. A spokeswoman for Scotiabank couldn't be reached for comment.

Vale holds minority stakes in 18 oil and gas exploration blocks in the Santos, Espirito Santo, Para-Maranhao and Parnabaiba basins. In 2007, it spent $1 billion in purchasing stakes in nine blocks in a government auction, later doubling its holdings via purchases from private companies.

In most of the blocks, Vale is a partner with state-controlled Petroleo Brasileiro SA (PBR, PETR4.BR), which may have preferential purchase rights if Vale sells its holdings. Vale officials have said the firm may keep some natural gas assets to use at its own operations.

Earlier this month, Vale's chief executive Murilo Ferreira said the company would make a decision on the possible sale of its oil and gas assets by the middle of this year.

-By Matthew Cowley, Dow Jones Newswires; +55 11 3544 7082; matthew.cowley@dowjones.com

-Rogerio Jelmayer in Sao Paulo, Diana Kinch in Rio de Janeiro and Angel Gonzalez in Houston contributed.

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