Brazilian state-owned Petrobras is expected to sign only one refinery sale contract by the end of the year, instead of five, as initially sought.

The delay in the refinery sales process stems from scheduling issues associated with the Covid-19 pandemic, oil market volatility and a court challenge recently decided in favor of Petrobras.

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Just a sale deal for one of Petrobras' refineries

The refinery's divestment program was launched in April 2019 as part of an agreement with antitrust body Cade. The only sale agreement expected to be signed by the end of December is for the 333 b/d Landulpho Alves (Rlam) refinery in Mataripe. Petrobras has been in exclusive negotiations with the Abu Dhabi state investment fund, Mubadala, for the refinery since July.

low values

In September, Petrobras said two similar bids for the Presidente Getulio Vargas refinery (Repar), 208.000 b/d, would require a second round of binding offers, possibly this month. Chinese state-owned Sinopec and national fuel distributors Raízen and Ultrapar participated in the first round.

Petrobras is targeting the launch of tied offers in the fourth quarter for three more refineries: 208.000 b/d Alberto Pasqualini (Refap) in Canoas; 115.000 b / d Abreu e Lima (Renest) in Ipojuca; and 166.000 b/d Gabriel Passos (Regap) in Betim. Bids for three smaller refinery units are underway for the first half of 2021.

Petrobras is selling another refinery, the 39.600 b/d Refinaria Potiguar Clara Camarão (RPCC) in the state of Rio Grande do Norte, as part of an upstream cluster outside the scope of the original Cade Agreement.

Delays affect Petrobras

The delays are increasing the likelihood that Cade will grant an extension of the 2021 deadline for closing refinery sales.

Petrobras and the agency have discussed the possibility of an extension in recent weeks, company executives said. The sales schedule was complicated by health safety protocols and the Supreme Court challenge initiated in July. Earlier this month, the court rejected a Senate request to place the sales under congressional oversight.

The company relies on revenue from the sale of refineries to reduce debt. The sales are a key facet of its $20 billion to $30 billion non-core asset divestment target, likely expanded under a business plan to be released in November.