Abpip Files Action With CADE for More Transparency in Petrobras' Refinery Divestment Project

Abpip Files Action With CADE for More Transparency in Petrobras’ Refinery Divestment Project

Written by Ruth Rodrigues

Published on 12/08/2022 at 22:43

Foto: Fernando Frazão/Agência Brasil

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After Signing Contract with the CADE to Sell Its Refineries in Brazil in 2019 and Failing to Meet the Final Deadlines of the Divestment Process, Petrobras Is Now Facing an Accusation of Lack of Transparency in the Project by Abpip.

The Brazilian Association of Independent Oil and Gas Producers (Abpip) has an ongoing process at the Administrative Council for Economic Defense (CADE) against the state-owned Petrobras, questioning the company’s lack of transparency in the sale process of its Brazilian refineries. The state-owned company’s divestment project has undergone several final deadline extensions, and the association believes that the fuel market is being harmed by the lack of commitment.

Petrobras’ Refinery Divestment Project in Brazil Initiated at CADE by Abpip Due to Lack of Transparency from the State-Owned Company

The fuel market in Brazil has become even more unstable this past week, as CADE received a protocol of action from Abpip for an analysis of the constant extensions of final deadlines for Petrobras’ refinery divestment project in Brazil.

The association believes there is a lack of transparency and a negative impact from the delayed deadlines on the fuel market in Brazil and requests measures to mitigate the issue.

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Petrobras signed a Commitment Term for Termination of Conduct Related to the Oil Refining Market (TCC) with CADE in 2019 and committed to carrying out a divestment project for its Brazilian refineries, thereby granting eight structures to the private initiative. They are: Abreu e Lima Refinery (RNEST), Shale Industrialization Unit (SIX), Landulpho Alves Refinery (RLAM), Gabriel Passos Refinery (REGAP), Presidente Getúlio Vargas Refinery (REPAR), Alberto Pasqualini Refinery (REFAP), Isaac Sabbá Refinery (REMAN); Lubricants and Petroleum Derivatives of the Northeast (LUBNOR).

In addition, a deadline for project completion was set by CADE and Petrobras for December 31, 2021, during which the state-owned company should publish reports and data periodically regarding fuel prices at the refineries to ensure more transparency throughout the entire sales process of the structures.

However, since the beginning of the process, four new agreements between Petrobras and CADE have been approved to extend the final deadlines for the project, raising concerns from Abpip regarding the transparency of the process.

Abpip Requests Temporary Measures to Control Fuel Market in Action at CADE Regarding Transparency of the State-Owned Company’s Refinery Sales

The document from Abpip sent to CADE requests the creation of temporary measures to contain the advancement of final deadline extensions and control the fuel market in Brazil, which is currently facing high instability.

Furthermore, the association stated that there is a lack of transparency in the state-owned company’s divestment process and that the Brazilian fuel market is now suffering the impacts of the lack of information and the incomplete sale process of the refineries.

The main problem caused by the constant extensions in the process, according to Abpip, is a monopolized control of the fuel market by Petrobras in the country, preventing competitiveness and consequently a reduction in product prices in this segment.

Additionally, Abpip’s Executive Secretary, Anabal Santos Jr, commented that “It is essential for the company to provide publicity and transparency regarding the criteria and methodology used to charge for the mentioned services and refrain from charging for services not rendered or that were not requested by its independent clients” and requested more publicity regarding CADE’s and Petrobras’ decisions in the process of selling the Brazilian refineries.

Abpip Files Action With CADE for More Transparency in Petrobras’ Refinery Divestment Project

After Signing Contract with the CADE to Sell Its Refineries in Brazil in 2019 and Failing to Meet the Final Deadlines of the Divestment Process, Petrobras Is Now Facing an Accusation of Lack of Transparency in the Project by Abpip.

Petrobras’ Refinery Divestment Project in Brazil Initiated at CADE by Abpip Due to Lack of Transparency from the State-Owned Company

Abpip Requests Temporary Measures to Control Fuel Market in Action at CADE Regarding Transparency of the State-Owned Company’s Refinery Sales

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Abpip Files Action With CADE for More Transparency in Petrobras’ Refinery Divestment Project

After Signing Contract with the CADE to Sell Its Refineries in Brazil in 2019 and Failing to Meet the Final Deadlines of the Divestment Process, Petrobras Is Now Facing an Accusation of Lack of Transparency in the Project by Abpip.

Petrobras’ Refinery Divestment Project in Brazil Initiated at CADE by Abpip Due to Lack of Transparency from the State-Owned Company

Abpip Requests Temporary Measures to Control Fuel Market in Action at CADE Regarding Transparency of the State-Owned Company’s Refinery Sales

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