Though the country has progressed in the past decade, it still struggles with political and economic instability. The attack by the MEND is a reminder of the past violence that the country has seen. Petrobras has been invested 10 years in Agbami and is still to see revenues from oil. Exiting at this point would prevent any further capital investments into the project. Statoil is already a partner in the Agbami project and selling out would be a seamless process. Maybe, Petrobras could negotiate a higher acquisition amount with Statoil. The cash flows from the project are shrouded with uncertainty and given the bearish news from the US unemployment, a recession could majorly affect prices of oil, demand for oil and in turn revenues. Option 3: Looking for additional potential buyers of share in Agbami Petrobras’s The only advantage of this option over offer is that Petrobras might be able to get a accepting Statoil’s much higher price for their share in Agbami. However, finding a new acquirer might be a time consuming process. Additionally, selling out to a new partner would require approvals from the existing partners of the project which may be hard to get.
Though the country has progressed in the past decade, it still struggles with political and economic instability. The attack by the MEND is a reminder of the past violence that the country has seen. Petrobras has been invested 10 years in Agbami and is still to see revenues from oil. Exiting at this point would prevent any further capital investments into the project. Statoil is already a partner in the Agbami project and selling out would be a seamless process. Maybe, Petrobras could negotiate a higher acquisition amount with Statoil. The cash flows from the project are shrouded with uncertainty and given the bearish news from the US unemployment, a recession could majorly affect prices of oil, demand for oil and in turn revenues. Option 3: Looking for additional potential buyers of Petrobras’s share in Agbami The only advantage of this option over accepting Statoil’s offer is that Petrobras might be able to get a much higher price for their share in Agbami. However, finding a new acquirer might be a time consuming process. Additionally, selling out to a new partner would require approvals from the existing partners of the project which may be hard to get.
Petrobras%20Proposed%20Solution.docx