SAO PAULO (Reuters) – The board of Brazil’s state-run oil company Petroleo Brasileiro SA┬áhas approved the start of exclusive negotiations to sell its controlling stake in Petrobras Argentina┬áto Pampa Energia SA, according to a Petrobras securities filing on Wednesday.

Petrobras Argentina is among the four largest producers of oil and gas in the neighboring country and has extensive downstream operations, including refining, petrochemicals and power generation.

The Brazilian company said earlier this year that it planned to sell its stake in Petrobras Argentina, as it tries to reduce debt and raise capital to keep core investments going in Brazil.

Petrobras said its board approved talks with Pampa Energia for a period of 30 days that could be extended for another 30 days.

“The transaction would still be subject to approvals of the terms and final conditions by our board and management, and by the market regulators,” Petrobras said in the filing.

Argentina-based Pampa Energia SA is the largest integrated power company in Argentina and produced around 8 percent of all the country’s electricity, according to information on its website. Its press office did not immediately respond to a request for comment.

Pampa controls Transener, which operates Argentina’s largest high tension power transmission line, and also has a stake on Edenor, the largest power distributor firm in the country.

In a separate filing, Petrobras said its board had also approved the start of a competitive process to sell rights to explore and develop a group of onshore oil fields in Brazil, along with related assets, without naming possible buyers.

(Reporting by Brad Haynes, Priscila Jordao and Marcelo Teixeira; Editing by W Simon)