Petrobras backtracks and rescinds sale of refinery in Ceará

Petrobras informed, in the early hours of this Monday (27), that it decided to reverse the sale of the Lubrificantes e Derivados de Petróleo do Nordeste Refinery (Lubnor), approved in mid-June by the Administrative Council for Economic Defense (Cade). The unit was sold for US$34 million to the Grepar Participações consortium, in 2022.

According to a statement issued by the state-owned company, the contract was “terminated due to the lack of compliance with the Conditions Precedent established therein by the Final Deadline defined in such contract (11/25/2023), despite the best efforts undertaken by Petrobras to conclude of the transaction.”

“Petrobras reinforces its commitment to the operational continuity of Lubnor, with the reliability and availability of its units and ensuring safety and respect for the environment and people”, said the state-owned company (see in full).

The transfer of management from Petrobras to Grepar had been postponed since August, after Cade’s approval, and should have been completed in October. The oil company stated that there were still some conditions to be met in the privatization process.

Lubnor is located in Fortaleza and has an authorized processing capacity of 8,200 barrels/day. The unit is one of the national leaders in asphalt production, and the only refining unit in the country to produce naphthenic lubricants, according to Petrobras.

Privatization of units began in 2019

The sale of Lubnor was part of a privatization process of Petrobras refineries, which began in 2019 as part of the divestment plan under the Michel Temer (MDB) and Jair Bolsonaro (PL) governments. At the time, the justification was to concentrate on more profitable assets, providing greater competitiveness and transparency to the refining segment in Brazil.

However, during last year’s electoral campaign, then-candidate Luiz Inácio Lula da Silva (PT) criticized the privatization of Petrobras units, mainly refineries, which he considers strategic for the country.

In addition to Lubnor, Petrobras is considering repurchasing the Mataripe Refinery, in Bahia (formerly Landulpho Alves, Rlam), from the sovereign wealth fund Mubadala, in Abu Dhabi. The negotiations were mentioned by the president of the state-owned company, Jean Paul Prates, after the presentation of the company’s new investment plan, approved last week by the Board of Directors.

“It’s a possibility. But it is another issue that we cannot comment on, because of the negotiations. We talked to Mubadala about several things, this is also part of this process, but it is not the main thing”, Prates told journalists. Rlam was sold in December 2021 for US$1.8 billion.

The new plan indicates that Petrobras intends to invest US$17 billion in refining, transporting and selling oil and oil products between 2024 and 2028. Of this, US$5 billion is aimed at projects still being evaluated, which may include possible acquisitions.

Minister Alexandre Silveira, of Mines and Energy (MME), has defended the repurchase of privatized units, which he called the “dismantling of the Petrobras System”.