Petrobras Scraps Bid For Eni's Galp Stake

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Petrobras, Brazil's state-run oil giant, has scuttled discussions with Eni SpA, Italy's largest oil company, regarding the acquisition of the company's stake in Portugal's Galp Energia. Petrobras said in January it was in talks with Eni to acquire its 33% stake in Galp for up to $5.6 billion.

Petrobras (PBR) disclosed it had ended the talks in a regulatory filing, but declined to elaborate further. When news of the talks was first reported, Eni (E) acknowledged it was talking to Petrobras, but was also careful to note that was just one option the company was considering for its Galp investment.

Galp and Petrobras are partners in some of Brazil's largest pre-salt oil fields. Eni is looking for other buyers after the talks collapsed and will only sell its stake in Galp when it receives an offer that meets expectations, Bloomberg News reported, citing the Italian news agency Ansa.

Eni has owned the Galp interest since 2000 and has turned on a profit on the investment, so the company may not be rushing to sell the stake. Galp also operates the Sines and Porto refineries in Portugal, with combined refining capacity of 310,000 barrels of crude a day, according to Bloomberg.