OREANDA-NEWS. Brazil's state-controlled Petrobras has agreed to sell assets in Argentina and Chile in two separate transactions valued at a total of around $1.38bn, the first steps in the heavily indebted company's ambitious plan to shed $14bn in non-core assets this year.

After weeks of exclusive negotiations, Petrobras agreed to sell a 67.2pc stake in its Argentina subsidiary to Argentinian firm Pampa Energia for $892mn. The remaining 32.8pc of Petrobras Argentina is held by investors.

The Argentina assets include some 30 upstream contracts, a network of service stations, the 30,500 b/d Bahia Blanca refinery in Buenos Aires province, a petrochemical plant in Santa Fe province, a majority stake in natural gas transportation company TGS and a 34pc stake in LPG fractionator Mega, among others. The company also holds interests in the power sector, operating the 825MW Genelba combined-cycle plant in Marcos Paz, Buenos Aires province and the 245MW Pichi Picun Leufu hydroelectric plant in Neuquen province, and holds minority stakes in thermal plants.

Under the agreement, Petrobras will retain a 33.6pc stake in the gas-prone Rio Neuquen upstream contract in Argentina and 100pc of the gas-producing Colpa Caranda fields in Bolivia.

Petrobras separately agreed to a $490mn deal with Latin American private equity group Southern Cross for all shares in its Chilean fuel distribution subsidiary. Petrobras Chile owns 279 service stations, eight fuel distribution terminals, 11 airport operations, participation in two logistics companies and one lubricants plant, Petrobras said.

The transactions are expected to close in the second half of 2016, following regulatory approvals.

Petrobras says it remains confident it can meet its 2016 divestment target of $14.4bn, but the deals announced last night are the first the company has concluded this year.

Petrobras has confirmed it is working on selling other assets, including pipelines, fuel distribution, regasification terminals, refineries, and exploration and production acreage.

The company sold around $700mn in assets in 2015, including 26 oil and gas blocks in Argentina's southern province of Santa Cruz for $101mn to local firm Corporaci?n Am?rica.

But the company?s divestment plan is widely seen as facing high execution risks amid lower oil prices and an intense political crisis in Brazil.

Petrobras will release first quarter results on 12 May.