* Company selling assets to pay for giant expansion plan
* Prices offered Petrobras have not met initial expectations
* Petrobras cut outlook for asset sales by 40 pct in March
RIO DE JANEIRO, May 24 Brazil's state-controlled oil company Petroleo Brasileiro SA said on Friday its executive directors have rejected offers to buy its Argentina operations, in the latest setback for the company's shrinking $9 billion asset-sale plan.
The announcement, made in a terse securities filing, did not say how many offers were made or which assets were the subject of the offers. The company had said on May 14 that it was considering a proposal from Argentine companies.
Argentine newspapers at the time reported that Petrobras had agreed to sell a 51 percent stake in its Argentine unit, Petrobras Argentina SA, to Argentina's Oil Combustibles. Petrobras Argentina has oil and gas exploration and production assets as well as refining and distribution operations.
Petrobras reportedly opened bidding for the Argentine assets in December and has been planning to sell them since at least November.
The company is trying to sell assets in Latin America, the United States, Japan, Brazil and Africa to help pay for a $237 billion five-year expansion that is the world's largest corporate investment program. It needs the cash as declining output, new field delays and government requirements that it subsidize local fuel prices crimp revenue and profit and drive up debt.
Rio de Janeiro-based Petrobras' efforts to sell assets such as those in Argentina, its exploration, production and refining assets in and around the Gulf of Mexico, a refinery in Japan and oil fields and exploration blocks in Africa, have not been as successful as first expected.
Reuters reported Dec. 4 that it was having trouble selling $4 billion of offshore oil and gas assets in the Gulf of Mexico that Chief Financial Officer Almir Barbassa called the most important part of the asset sale program.
In the wake of the Gulf of Mexico difficulties, the company revised its five-year plan in March to reduce the expected take from asset sales by nearly 40 percent to $9 billion from $14.8 billion.
Petrobras also pulled the Pasadena Refinery in Pasadena, Texas from the list of assets up for sale after allegations were raised that the purchase, whose price has ballooned to $1.2 billion, may have involved improper behavior by company executives and led to an expensive lawsuit with its former 50 percent partner, Belgium's Transcor Astra Group.
The decision to pull Pasadena from the sale list also comes after refining margins recovered at the refinery and Brazilian government fuel-pricing policies forced Petrobras to import more gasoline and diesel fuel.
In addition to Petrobras' Argentine oil and gas exploration and production assets and natural gas infrastructure, Petrobras' Argentine operations include a 31,500 barrel per day (bpd) refinery in Bahia Blanca, Argentina, and a 28.5 percent stake in another 32,000 bpd refinery in Salta Province. That refinery is 50 percent owned by YPF and 21.5 percent by Pluspetrol.
Reuters reported on March 27 that Petrobras was seeking $5 billion for its Nigerian oil assets.
Petrobras' asset sale efforts through have not been totally unsuccessful. Earlier Friday it said it sold a 12 percent stake in a Tanzania oil exploration block to Norway's Statoil for an undisclosed price.
In November it also sold a 40 percent stake in an offshore oil and gas concession to Brazil's OGX Petroleo e Gas SA for $270 million.