Fitch Raises Brava Energia to BB After Ecopetrol’s US$1.2 Billion Takeover

Brazil · MARKETS

Analysts Lucas Rios, Erick Pastrana and Natalia O’Bryrne said the Colombian state oil company’s control brings clear strategic incentives, though production scale keeps the Brazilian producer at the lower end of the BB category.

Fitch Ratings has upgraded Brava Energia to BB from BB-, with a stable outlook, and raised the Brazilian oil producer’s national-scale rating to AA+(bra) from AA-(bra), Valor reported on 26 August 2026, one week after Colombia’s Ecopetrol completed its acquisition of a controlling 51% stake in the company.

What Fitch said and why

Fitch analysts Lucas Rios, Erick Pastrana and Natalia O’Bryrne wrote that the upgrade of Brava Energia reflects the effects of Ecopetrol’s takeover, which brings clear strategic incentives for the Colombian state oil company: the deal expands its proved reserves by 12% and lifts consolidated production and EBITDA by 11% and 10%, respectively. The ratings had been on Rating Watch Positive since May, when the bid was announced; the watch was removed and the outlook set at stable.

The agency kept Brava Energia at the lower end of the BB category because of its production scale, estimated at an average of 85,000 barrels of oil equivalent per day in 2026 and 93,000 in 2028. The stable outlook reflects an expectation that the company will replace produced reserves and hold at least 400 million barrels of proved reserves over the projection horizon.

Liquidity was another support. Brava held R$4.7 billion in readily available cash in June, an amount Fitch considers sufficient to amortize all debt and merger obligations maturing through 2028. The ratings also assume the arbitration filed by Westlawn over the Atlanta field, which began in June, will have no relevant impact on the company’s credit profile.

The US$1.2 billion takeover behind the upgrade

Ecopetrol completed the acquisition on 17 and 18 August through its subsidiary Ecopetrol Investimentos do Brasil, ending up with 236,924,207 common shares, about 51% of the voting capital of Brava. The aggregate consideration was roughly US$1.2 billion, funded through an intercompany loan from Ecopetrol Capital AG.

The position was assembled in two legs. In a tender offer auction on the B3 exchange on 5 August, the Colombian company bought 116,110,717 shares, about 25% of the capital, at R$23 each, a total of about R$2.67 billion, roughly US$520 million at 5.14 reais to the dollar. A separate block of 120,813,490 shares, about 26%, had been agreed privately on 23 April with the funds Somah Printemps Quantum Group, Jive Group and Yellowstone at R$24 per share.

The price gap between the two legs drew scrutiny from Brazil’s securities regulator, the CVM, which suspended the offer in June while questioning why tender-offer holders were being offered less than the private sellers. The regulator’s board accepted Ecopetrol’s appeal on 14 July, the suspension was lifted the next day, and the amended notice set the auction for 5 August, with financial settlement on 17 August.

A long road of regulatory clearances

The deal, first announced on 23 April at a premium of about 27.8% over the 90-day average price of Brava’s shares, needed several consents before closing. Debenture holders of the company’s third 3R and third Enauta issuances granted waivers on 8 June, removing the risk of accelerated repayment because of the change of control. Antitrust regulator Cade approved the transaction on 13 May, a decision that became final on 16 June.

For Ecopetrol, the acquisition strengthens its growth platform in Brazil, where it already partners with Shell in the Gato do Mato pre-salt blocks, and fits its 2040 strategy of geographic diversification. On a 51% basis, the stake adds about 42,000 barrels of oil equivalent per day of production and a proportional share of the 459 million barrels of oil equivalent in proved reserves that Brava reported for 2025.

Brava Energia, formed by the merger of 3R Petroleum and Enauta, averaged about 81,000 barrels of oil equivalent per day in 2025 and reached about 84,400 in June 2026. For the twelve months ended in June, the company reported revenue of about US$2.34 billion, EBITDA of about US$1.05 billion and net income of about US$122.2 million, according to unaudited figures cited by Ecopetrol.

What the upgrade means from here

The BB level still sits two notches below investment grade, but the upgrade lowers funding costs for Brava just as it starts life under state-controlled ownership from Colombia. It also closes a ratings cycle that began in May, when Fitch placed the company on positive watch hours after the bid was disclosed.

Attention now shifts to integration: how Ecopetrol will manage a company that produces most of its oil and gas in Rio Grande do Norte’s Potiguar cluster and offshore at Atlanta, and whether the promised reserve replacement, at least 400 million barrels proved, materializes under the new controller. Fitch’s stable outlook signals the agency expects it will.

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Sources

• valor.globo.com
• www.prnewswire.com
• www.estadao.com.br
• www.moneytimes.com.br
• defato.com
• tagdlaw.com.br

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