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Argentina Asks to Defer Power Payments to Brazil’s Petrobras, Sources Say

Brazilian state-run energy firm Petroleo Brasileiro has received a request from Argentina to defer payments on some electricity import contracts, three people familiar with the discussions told Reuters on Monday.

Two Brazilian sources said Petrobras is weighing the request. An Argentine source confirmed the government had made the request to Petrobras, which supplies electricity to Argentina from power plants in Brazil.

The move comes as Argentina, which is grappling with rampant inflation and dwindling foreign reserves ahead of presidential elections this year, needs to secure crucial electricity supply to heat homes during South America’s winter.

Argentina is seeking better contract terms to honor its commitments in the face of the country’s fiscal challenges, the sources said.

According to one of the sources, Argentina is pushing to alter its monthly payments to Petrobras under current contracts to make payments every 180 days instead.

All three sources requested anonymity due to the sensitivity of the discussions.

The request to defer payments took place during a meeting between the presidents of the two countries, Luiz Inacio Lula da Silva and Alberto Fernandez, in Brasilia last week, according to the newspaper O Globo, which first reported the talks on Monday.

Petrobras CEO Jean Paul Prates also participated in the meeting, O Globo reported.

Lula and Fernandez are expected to meet again on Tuesday at a gathering of the Mercosur trade bloc in Puerto Iguazu, Argentina. (Reporting by Marta Nogueira and Rodrigo Viga Gaier in Rio de Janeiro; Walter Bianchi in Buenos Aires and Letícia Fucuchima in São Paulo; Writing by Ana Mano; Editing by Brad Haynes, Jonathan Oatis and Sonali Paul)

Source : Market Screener