Petrobras advances to restart refinery in Bahia

Petrobras reported that it has begun negotiations for the final phase of acquisition and formation of a partnership for the Mataripe Refinery, in Bahia, and the project under development for a biorefinery with Mubadala Capital. This last step, known as downstreamencompasses flow, logistics and distribution.

In this process, the due diligence of the agreement, in which assets and business models are evaluated and the scope of potential future investments and joint development of new technologies are discussed. Therefore, no binding document on the partnership has yet been signed until all analyzes are completed.

The Mataripe refinery – which was previously called Landulpho Alves Refinery (Rlam) – was sold in 2021 by the Bolsonaro government to Acelen, a company owned by the Mubadala Capital fund, the investment arm of the sovereign wealth fund of Abu Dhabi, capital of the United Arab Emirates.

The announcement comes after a week of internal crisis in the government involving the distribution of dividends, a situation that highlighted President Lula’s interference in the management of the state-owned company and suggested the departure of Jean Paul Prates from command of the company. In January, President Lula went to Petrobras’ “resumption of investments” ceremony at the Abreu e Lima Refinery, in Ipojuca, in the metropolitan region of Recife.

The Abreu e Lima refinery was inaugurated during Lula’s first government and became known as the “most expensive refinery in the world”, in addition to having irregularities highlighted by the Federal Audit Court (TCU) and by the Lava Jato operation. Initially, the project was supposed to cost US$2 billion, but it consumed at least US$18.5 billion.

Furthermore, the government’s idea is to resume the refineries that were privatized under the previous government. For the Ministry of Mines and Energy, expanding the refining and petrochemical chain is a way to strengthen the guarantee of national supply and reduce external dependence.

Experts assess that, if on the one hand privatization can improve competition, on the other hand, the lack of price control could be a side effect, such as the most expensive gas cylinder in the country at the Amazonas refinery. Another point is that nationalization brings to mind the political interference and the corruption scandal of previous PT administrations, uncovered by the Lava Jato operation.

In the opinion of consultants and businesspeople, the bad thing is the “nationalize/denationalize” movement, which ends up creating a scenario of regulatory destabilization and legal uncertainty that drives away investors.

In the case of the Mataripe Refinery, the processing capacity is 333 thousand barrels/day, and its assets include four storage terminals. According to the Brazilian Infrastructure Center (CBIE), it represents 15% of Petrobras’ refining capacity. The integrated biorefining project has a projected production capacity of 20 thousand barrels/day in the initial phase and will be made from vegetable oil in Bahia and Minas Gerais.

Equatorial Margin is another thorny topic

On Friday, the company also announced the creation of a working group between representatives of Petrobras and the governments of the states that are part of the Legal Amazon Consortium to discuss the exploration of the Equatorial Margin.

The proposal was to present projects that are being developed in relation to preservation and sustainability and investments in the region to provide security regarding the exploration that Petrobras wants to carry out. The stretch, which runs from Rio Grande to Pará, has become a pre-salt gold mine and is a bet for the coming years, but so far the Brazilian Institute of the Environment and Renewable Natural Resources (Ibama) has not authorized drilling of an oil well in the Foz do Amazonas basin, in Amapá.

In a more conservative projection, the Ministry of Mines and Energy (MME) believes that there are around 10 billion commercially recoverable barrels in this new frontier. This volume is close to that of proven pre-salt reserves – 11.5 billion barrels by the end of 2022, according to the National Petroleum Agency. Petrobras was available to present the requested studies, but Ibama has not yet given its verdict.

Research shows that only 5% of fines were paid in 10 years

This Saturday, a survey carried out by Folha de S. Paulo shows that in 10 years Petrobras accumulated more than 3 thousand fines, totaling almost R$1 billion for environmental infractions, but only paid 5%.

The majority, including those with the highest value, refer to oil exploration processes, such as improper dumping of oil at sea, continuous disposal of water resulting from the procedures adopted and non-compliance with conditions established in the licenses issued by Ibama.

“Petrobras reserves the right to contest fines administratively in cases where there are controversial points and such questions are often accepted by the competent bodies, which results in the cancellation or reduction of the value of the fines,” the company responded to the newspaper.