Canadian Forbes Manhattan Resources Acquires All Shares of Petrobras’ Shale Processing Unit (SIX) for $178.8 Million, Aiming to Focus on Pre-Salt Fields

Shale Is The Third Unit To Have The Sale Contract Signed This Year By Petrobras. Transaction Of R$ 178.8 Million Still To Be Approved By Regulatory Bodies

The Brazilian oil giant Petrobras is divesting to invest more and better, focusing on new challenges, such as the deep and ultra-deep offshore fields of the pre-salt and on technological innovations in the remaining refining park. To this end, the oil company signed a contract with Forbes & Manhattan Resources Inc. (F&M Resources), a wholly-owned subsidiary of Forbes & Manhattan Inc. (F&M), for the sale of the Shale Industrialization Unit (SIX) in Paraná, for the amount of R$ 178.8 million (US$ 33 million).

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The Landulpho Alves (RLAM) And Isaac Sabbá (REMAN) Refineries Were Also Sold This Month By The State-Owned Company.

The SIX is the third among Petrobras’ eight refineries that are in the process of being sold to have the contract signed. On March 24, 2021, the sale contract for the Landulpho Alves Refinery (RLAM) in Bahia was signed, and on August 25, 2021, the sale contract for the Isaac Sabbá Refinery (REMAN) in Manaus, Amazonas was signed.

According to Petrobras, the sale of the SIX is in line with Resolution No. 9/2019 of the National Energy Policy Council, which established guidelines for promoting free competition in the refining activity in the country, and integrates the commitment made by the state-owned company with CADE to open the refining sector in Brazil. The divestment process of the SIX, approved by Petrobras’ Board of Directors on this date, strictly followed the Divestment Systematics approved by the Federal Court of Accounts (TCU). The divestment project of the refinery was approved at all levels of Petrobras’ corporate governance.

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This Operation Strengthens Petrobras’ Refining Activity Repositioning Strategy

Rodrigo Costa, Petrobras’ Refining Director, highlighted the importance of signing the contract: “This operation strengthens the strategy of repositioning the refining activity at Petrobras. This is an important step in fulfilling the commitment we made with CADE, as this is the third sale contract for refining units that we have signed in 2021. Petrobras is focused and working to be among the best refiners in the world, in efficiency, quality of products, and performance of its operations,” Costa emphasizes.

Once the divestment processes of the three refining units whose sale contracts have already been signed (RLAM, REMAN, and SIX) are concluded, Petrobras will account for about 50% of the fuel supply market in the country. In addition to Petrobras and the new operators of these refineries, the market is also supplied by importers and producers of biofuels.

The Sale of SIX Reaffirms Petrobras’ Commitment To Continue With Its Divestment Plan

The operation reaffirms Petrobras’ commitment to continue with its divestment plan. In Refining, the company defined the assets to be sold through strategic portfolio management. In this process, Petrobras is divesting to invest more and better, focusing on new challenges, such as in deep and ultra-deep offshore fields of the pre-salt and on technological innovations in the remaining refining park. The company is investing to transform resources into wealth, with returns benefiting society as a whole. Investments have systematically been greater than divestments, making Petrobras an even stronger company.

The president of F&M, Stan Bharti, emphasizes that the SIX will remain a significant contributor and employer in the region where it operates, supporting the well-being of the local community. “The company plans to dedicate all attention and resources to ensure the maintenance of the excellence of the current operation in addition to exploring options for future expansion of SIX’s activities while ensuring that it operates according to the highest international standards, without interruption, for many decades. We will always support the local communities where the projects are located, and Forbes expects to support the area around the SIX facilities.”

Petrobras Employees Who Decide To Stay With The Company May Opt For Transfer To Other Areas Of The Company

After the sale operation is completed, Petrobras will continue to operate the unit through a transitional service contract (Transition Service Agreement – TSA) while the buyer structures its processes and builds its teams. This will occur under a service provision agreement, avoiding any operational interruption. Petrobras and F&M reaffirm their strict commitment to operational safety at the SIX in all phases of the operation. Partnerships established by the SIX with the municipality of São Mateus do Sul for the supply of shales – used for paving city streets – and for the disposal of urban waste in areas of the unit that have already undergone mining will also be maintained.

Petrobras employees who decide to stay with the company may opt for transfer to other areas of the company. Another possibility is to join the Voluntary Dismissal Program, with a benefits package. Petrobras has been conducting the divestment processes with transparency and respect for employees. The company discloses internally and externally the main steps of the process and provides full support to the professionals involved. No Petrobras employee will be dismissed as a result of the transfer of control of the SIX to the new owner.

The SIX, located in the municipality of São Mateus do Sul, in the State of Paraná, has a processing capacity of 5,800 tons/day of shale, focusing on the production of fuel oil, naphtha, fuel gas, liquefied gas, sulfur, and shale water, in addition to holding exploration rights for the shale mine.