Petrobras to restart REFAP refinery sale process

Petróleo Brasileiro SA (Petrobras) has ended discussions with Ultrapar Participações SA (Ultrapar) related to the latter’s now terminated binding proposal for the proposed purchase of Petrobras’ 208,000-b/d Refinaria Alberto Pasqualini (REFAP) refinery and associated assets in Rio Grande do Sul (OGJ Online, Feb. 9, 2021).

Despite best efforts made by both companies, Petrobras and Ultrapar agreed to end negotiations with no penalties for either party after certain critical conditions could not be met to reach mutual agreement on completion of the refinery’s sale and purchase process, Petrobras said on Oct. 1.

With Ultrapar no longer a potential buyer, Petrobras said it will start a new competitive process for sale of RFAP and its associated logistics assets—including two storage terminals as well as a set of pipelines totaling 260 km—in due time.

Petrobras separately confirmed competitive sale processes remain under way and negotiations ongoing for other refining assets included in the operator’s Brazilian downstream divestment program, including:

• The 166,000-b/d Refinaria Gabriel Passos (REGAP) refinery—including a set of pipelines of more than 720 km—in Betim, Minas Gerais.
• The 8,000-b/d Lubrificantes e Derivados de Petróleo do Nordeste (LUBNOR) refinery in Fortaleza, Ceará, which is one of the national leaders in asphalt production, as well as the only plant in Brazil to produce naphthenic lubricants.
• The 6,000-b/d Unidade de Industrialização do Xisto (SIX) unit—including a mine in one of the largest oil shale reserves in the world and a shale processing plant—in São Mateus do Sul, Paraná.

The operator, however, revealed no definitive timelines as to when it anticipates completing purchase and sale agreements for REGAP, LUBNOR, and SIX.

Revised divestment plans, completed sales

Cancellation of REFAP’s sale to Ultrapar follows Petrobras’ confirmation in August that potential buyers previously interested in purchasing its 130,000-b/d Refinaria Abreu e Lima (RNEST) refinery in Pernambuco—which has the potential to double its capacity 260,000 b/d with startup of a second processing line and includes both a terminal and a 101-km set of short pipelines—formally declined to submit a binding proposal for the assets (OGJ Online, Aug. 26, 2021).

At the time, Petrobras said it would evaluate next steps regarding RNEST’s future after completing internal procedures to end the refinery’s then-current sale process.

In February, Petrobras also decided to close and restart the sale process for its 208,000-b/d Refinaria Presidente Getulio Vargas (REPAR) refinery and related assets—including five storage terminals and a 476-km set of pipelines—in Paraná after initial binding proposals fell short of Petrobras' economic-financial evaluation for the assets.

While revised divestment plans for REFAP, RNEST, and REPAR remain pending, Petrobras has inked sale and purchase agreements with Mubadala Capital (MC)—an arm of Abu Dhabi-based Mubadala Investment Co.—for the 333,000-b/d Refinaria Landulpho Alves (RLAM) refinery in São Francisco do Conde in the Recôncavo Baiano region of Bahia, and fuel distributor Atem's Distribuidora de Petróleo SA (Atem) for the 46,000-b/d Isaac Sabbá refinery (REMAN)—including a storage terminal—in Manaus, Amazonas (OGJ Online, June 10, 2021).