Brazil, Petrobras Extend Deadline to Sign Sales Contracts for 3 Refineries
08.09.2021 - NEWS

August, 2021 [SPGlobal] – Brazilian antitrust regulators and state-led oil company Petrobras have agreed to extend for a second time deadlines to sign sales contracts for seven refineries amid delays caused to site visits by the ongoing coronavirus pandemic.


“The sales process for these assets is subject to the evaluation of internal governance bodies of Petrobras,” the company said in a statement July 30. “Such operations are outlined in the terms signed with the Justice Ministry’s Antitrust Division, or CADE, in June 2019.”

CADE granted a second round of extensions after site visits were again delayed by a brutal second wave of the Brazil’s coronavirus outbreak in the first quarter. CADE had previously granted several extensions in March. Site visits and due diligence work have been broadly affected throughout the pandemic, further complicating an already complex and controversial divestment project.

Under terms of the original CADE-Petrobras deal signed in 2019, Petrobras had until Dec. 31, 2020, to sign sales contracts for eight of the company’s 13 operated refineries. The sales were then expected to be completed by Dec. 31, 2021.

The sales will reduce Petrobras’ share of Brazil’s refining market to about 50%. The company will retain five refineries in the country’s south and southeast regions, with access to the country’s two biggest markets in Rio de Janeiro and Sao Paulo.

Petrobras now has until Aug. 31 to sign contracts to sell the Refinaria Isaac Sabba, or REMAN, in Amazonas state. In March, CADE had extended the deadline until July 31.

Contracts for the sale of the Refinaria Lubrificantes e Derivados do Nordeste, or LUBNOR, in Ceara state; the Refinaria Alberto Pasqualini, or REFAP, in Rio Grande do Sul state; the Refinaria Gabriel Passos, or REGAP, in Minas Gerais state; the Refinaria do Nordeste, or RNEST, in Pernambuco state and the Unidade de Industrializacao de Xisto, or SIX, in Parana state much be signed by Oct. 30.

Petrobras previously had until July 31 to sign sales contracts for LUBNOR and REFAP. The deadline was left unchanged for SIX, REGAP and RNEST, according to Petrobras.

The deadline to sign the contract for the Refinaria Presidente Getulio Vargas, or REPAR, in Parana state was also maintained at Dec. 31.

RLAM refinery deal criticized

So far, Petrobras has reached a deal to sell one refinery: Refinaria Landulpho Alves, or RLAM, in Bahia state. In March, Petrobras agreed to sell RLAM to Abu Dhabi’s Mubadala Investment Co. for $1.65 billion. The deal, however, was challenged by several members of Congress and unions representing oil workers, which called on Brazil’s Federal Audit Court, or TCU, to halt the sale.

The deal was criticized after an internal Petrobras document was uncovered that indicated that the company valued the refinery at about $3.0 billion. The sales price was established by base scenarios, technical parameters and backed by independent consultants and auditors, according to Petrobras.

The TCU ultimately approved the sale, with Petrobras confirming that it will work closely with Mubadala over the next 15-18 months during a transition phase before transferring operations to the company.

RLAM has installed capacity to process about 333,000 b/d, or about 14% of Brazil’s refining capacity, according to Petrobras. The deal also includes four storage terminals and about 669 kilometers of oil and product pipelines linking the refinery and terminal operations.

The deal represents Mubadala’s first foray into Brazil, although the company has been a player in other Petrobras divestment efforts such as the sale of natural gas pipelines and distribution assets.

For more than 20 years, the Global Energy Awards has recognized achievements by companies who have faced complex challenges and capitalized on unique opportunities. Nominations open June 7, nominations close Aug. 27.

Click Here to Access Today a 7,000 Tank Terminal Database With a Pro Trial

7,000 terminals as per the date of this article. Click on the button and register to get instant access to actionable tank storage industry data

Petrobras Commits to Net-Zero Carbon Emissions
09.26.2021 - NEWS
September 26, 2021 [Argus] – Brazilian state-controlled Petrobras is the latest national oi... Read More
Brooge Petroleum Opens 60,000-cu-m Storage Facility in Fujairah
09.26.2021 - NEWS
September 26, 2021 [TradeArabia] – Brooge Petroleum and Gas Investment Company (BPGIC) has ... Read More
Shell to Build Biofuel Facility in the Netherlands
09.24.2021 - NEWS
September 24, 2021 [thechemicalengineer] – SHELL plans to build an 820,000 t/y biofuels fac... Read More
Total Safety Supports Vopak's Annual Safety Day
09.24.2021 - NEWS
September 24, 2021 [Bicmagazine] – Total Safety recently supported Vopak’s Freeport s... Read More