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Industry News

BTG Pactual Said to Invest $1 Billion in Sete Oil-Rig Operator

3 August 2012

(Bloomberg) August 3, 2012 – Banco BTG Pactual SA’s private-equity funds invested $1 billion in Sete Brasil Participacoes SA, more than doubling their stake in the oil-rig operator to 30 percent, according to four people with direct knowledge of the deal.

EIG Global Energy Partners LLC, a Washington-based private-equity firm, also invested in the Rio de Janeiro-based company as part of a 5.4 billion-real ($2.7 billion) capital increase, said the people, who asked not to be identified because the shifts in ownership haven’t been announced.

BTG, Banco Santander Brasil SA and Banco Bradesco SA (BBDC4) all held 13.7 percent stakes before the offering, according to Sete Brasil. Santander’s holding declined to 6.9 percent, while Bradesco, which didn’t buy additional stock, had its participation reduced to about 3 percent, the people said.

Sete Brasil is seeking capital as it plans to spend about $27 billion by 2020 building deep-water drilling platforms that will be rented by Petroleo Brasileiro SA (PETR4) in pre-salt fields off Brazil’s southern coast. The reservoirs are under about 6,500 feet of water and beneath 16,400 feet of sub-sea bedrock, sand and salt. Petrobras, as the state-controlled petroleum company is known, has said it holds oil reserves of as much as 8.5 billion barrels in five pre-salt fields.

Pension funds Petros and Funcef each held 19.2 percent before the capital increase, while Previ and Valia, which are also pension funds, had 10 percent and 5.5 percent, respectively. Petrobras held the remaining 5 percent and is keeping its stake.

BTG, Bradesco and Santander officials declined to comment, asking not to be named in accordance with company policies. Sete Brasil and EIG didn’t immediately respond to e-mails requests for comment.