OREANDA-NEWS. Brazilian state-controlled utility Cemig has expressed "preliminary interest" in acquiring power generation assets, including thermoelectric plants from state-controlled oil company Petrobras.

The interest in the assets aligns with Cemig's strategic plan to expand in generation, transmission and distribution.

Cemig chief executive Mauro Borges said the firm has begun preliminary talks with Petrobras on possible acquisitions as well as strategic partnerships.

Petrobras is prioritizing the sale of natural gas distribution and power generation assets in a \$13.7bn divestiture plan to be implemented in 2015-16.

The company says 40pc of the assets earmarked for sale are in the gas and electricity segment.

Petrobras owns stakes in 36 power plants with installed capacity of 6,885MW. In addition to its 21 thermoelectric plants, it also has five wind farms and two small hydroelectric plants.

Many of the thermal plants use imported LNG. Brazil has been fully dispatching thermoelectric plants over the past year in response to a severe drought that has depleted hydro reservoirs.

Cemig is controlled by Minas Gerais state.