Petróleo Brasileiro SA has officially started the nonbinding phase in its program to sell three of its Brazilian refineries and associated logistics assets, the sales of which were previously delayed to accommodate revisions to divestment plans for each of the sites.
As of Aug. 19, Petrobras began notifying potential buyers that they have been approved to participate and submit nonbinding proposals in the sale process for the refineries and related assets, including the 130,000-b/d Refinaria Abreu e Lima (RNEST) refinery; 208,000-b/d Refinaria Presidente Getulio Vargas (REPAR) refinery; and 208,000-b/d Refinaria Alberto Pasqualini (REFAP) refinery, the operator said.
A definitive timeframe for the nonbinding phases for the proposed sales, however, was not revealed.
Restart of sale processes for the refineries follows a series of delays to the divestment cycle in 2021 resulting from a mix of issues involving unqualified buyers expressing interest in the assets, qualified buyers failing to submit binding bids for the sites, and initial binding proposals falling short of Petrobras' economic-financial evaluation for the assets (OGJ Online, Oct. 1, 2021; Aug. 26, 2021).
Located in Ipojuca, Pernambuco, in northeast Brazil and representing 5% of the country’s total refining capacity, the RNEST refinery —which has the potential to double its capacity to 260,000 b/d with startup of a second 130,000-b/d processing train—includes a terminal with crude and product storage capacities of 4.706 million bbl and 5.496 bbl, respectively, as well a 101-km set of short pipelines.
Located in Araucária, Paraná, in southern Brazil and representing 9% of the country’s total refining capacity, the REPAR refinery—which caters mainly to the local markets of Paraná, Santa Catarina, São Paulo, and Mato Grosso do Sul—includes five terminals equipped to store 3.472 bbl of crude and 6.034 bbl of finished products. Logistics infrastructure assets involved in the sale also will include a 476-km pipeline network.
Located in Canoas, Rio Grande do Sul, in southern Brazil and representing 9% of the country’s total refining capacity, the REFAP refinery—which caters mainly to the local markets of Rio Grande do Sul, Santa Catarina, and Paraná—includes two terminals with crude and product storage capacities of 3.652 million bbl and 5.820 million bbl, respectively, as well as a set of pipelines totaling 260 km.
Downstream divestment progress
To date, Petrobras has four purchase and sale agreements pending under its broader downstream divestment program, which comes as part of a June 2019 agreement between Petrobras and Brazilian regulator the Administrative Council for Economic Defense (CADE) governing the operator’s ongoing program to divest most of its Brazilian refining and related logistics assets, as well as the opening of Brazil’s refining sector to increased competitiveness and transparency (OGJ Online, June 17, 2019).
Most recently, Petrobras signed a contract to sell its 10,400-b/d Lubrificantes e Derivados de Petróleo do Nordeste (LUBNOR) refinery in Fortaleza, Ceará—one of Brazil’s leading asphalt production plants and the country’s only refinery equipped to produce naphthenic lubricants—to Grepar Participações Ltda., a joint venture of Grecor Investimentos em Participações Societárias Ltda., Greca Distribuidora de Asfaltos Ltda., and Holding GV Participações SA (OGJ Online, May 26, 2022).
The LUBNOR deal, once completed, would follow sale of the operator’s 46,000-b/d Isaac Sabbá refinery (REMAN)—including a storage terminal—in Manaus, Amazonas, to Atem's Distribuidora de Petróleo SA (Atem) subsidiary Ream Participações SA, which is nearing the end of a 15-day waiting period required by law following CADE’s May 13 approval of the transaction (OGJ Online, May 16, 2022).
In 2021, Petrobras completed divestment of its former 333,000-b/d Refinaria Landulpho Alves (RLAM) refinery—now renamed Refinaria de Mataripe—in São Francisco do Conde in the Recôncavo Baiano region of Bahia, Brazil, to Mubadala Capital (MC), an arm of Abu Dhabi-based Mubadala Investment Co., as well as its 5,800-b/d Unidade de Industrialização do Xisto (SIX) unit—including a mine in one of the world’s largest oil shale reserves and a shale processing plant—in São Mateus do Sul, Paraná, to Forbes & Manhattan Resources Inc. (F&M Resources), a subsidiary of privately-held Forbes & Manhattan Inc. (F&M), Toronto, Ont. (OGJ Online, Nov. 12, 2021; June 10, 2021).
The competitive sale process remains under way and negotiations ongoing in the binding phase for the operator’s divestment of its 166,000-b/d Refinaria Gabriel Passos (REGAP) refinery—including a set of pipelines of more than 720 km—in Betim, Minas Gerais, Petrobras said in a June 27 release.
Brazilian refining plans
Despite its divestment program to shed nearly 50% (1.1 million b/d) of Brazil’s national refining capacity, Petrobras—as part of its portfolio management strategy and improved allocation of its capital—said it will continue to concentrate investments on assets with lower greenhouse gas (GHG) emissions that have proved more competitive over the years.
The investments come as part of the planned $6.1 billion Petrobras intends to spend on its refining business under the company’s 2022-26 strategic plan, as well as its previously announced RefTOP program, which aims to prepare the operator’s remaining refining assets both for an open, more competitive market in the country and the transition to a low-carbon economy.
Alongside expanding existing refining capacity, refining-related investments will focus on initiatives to increase efficiency and operational performance of Brazilian refineries not involved in operator’s divestment portfolio, which include the:
- 434,000-b/d Refinaria de Paulínia (REPLAN) refinery in Paulínia, São Paulo, Brazil.
- 239,000-b/d Duque de Caxias (REDUC) refinery in the Baixada Fluminense area of Brazil’s Rio de Janeiro state.
- 252,000-b/d Refinaria Henrique Lage (REVAP) refinery in São José dos Campos, São Paulo.
- 170,000-b/d Refinaria Presidente Bernardes (RPBC) refinery in Cubatão, São Paulo.
- 57,000-b/d Refinaria de Capuava (RECAP) in Mauá, São Paulo (OGJ Online, Mar. 9, 2021).