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EIG Considering 20 Potential Deals in Brazil’s Energy Sector

U.S.-based private equity group EIG is considering as many as 20 potential deals in the midstream and renewable energy sectors in Brazil, after buying the only Brazilian operator in the floating production storage and offloading (FPSO) industry, EIG’s head in Brazil, Flavio Valle, told Bloomberg in an interview.

At the end of last year, EIG announced a deal to buy Ocyan Participações S.A., the only Brazilian FPSO operator, for $390 million.

“The acquisition of Ocyan reflects EIG’s long-term, comprehensive Brazilian strategy focused on infrastructure supporting high-quality deepwater crude oil production, responsible decommissioning activities, and investments in renewables and low carbon projects,” the private equity group said at the end of 2023.  

Ocyan could benefit from the strategic plan of Brazilian state oil firm Petrobras, EIG’s Valle told Bloomberg.

Petrobras plans to add as many as 14 new FPSO platforms from 2024 to 2028, as it seeks to boost production from Brazil’s offshore pre-salt layer. In its strategic plan through 2028, Petrobras plans $102 billion in investments, up by 31% compared to the previous plan. Most of the planned capital expenditures (capex) – $73 billion – will go to production and exploration, Petrobras said at the end of last year. 

The EIG private equity group, which has amassed oil and gas infrastructure assets worldwide, is now looking at more deals in Brazil and considering up to 20 such potential transactions, Valle told Bloomberg.  

EIG is looking at opportunities to bid for natural gas pipeline assets and regasification terminals in Brazil. It could also consider repurchasing a stake it sold in the natural gas pipeline Transportadora Brasileira Gasoduto Bolivia-Brasil SA (TBG), Valle said. EIG could also be interested in fuel storage assets and solar and wind projects in Brazil, according to the executive.

South America’s top hydropower producer, Brazil, has been installing a lot of other clean energy sources over the past half-decade, with solar and wind power now accounting for nearly one-fourth of its power generation mix.

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By Tsvetana Paraskova for Oilprice.com

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