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In Addition to Fundraising Strategies and Partnerships with Companies in the Agricultural Sector. New Research and Development Projects Are Also Part of the Proposal.
It is essential that all investments go through a governance process, with some requiring more attention than others. According to the interviewee, all investments should be made considering value generation, margin, and financial attractiveness, regardless of whether they are related to fertilizers or any other area.
Therefore, governance is essential to ensure that investments are made strategically and responsibly, always aiming for financial return and business sustainability.
“Of course, if we compare an oil well in the pre-salt layer with a fertilizer plant, the financial returns will not be the same, but this does not mean that investing in fertilizers is a loss,” he stated.
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The Chief Financial Officer and Investor Relations Director, Sérgio Leite, emphasized that the criteria used to evaluate investments in fertilizer projects remain unchanged.
State-Owned CEO Discusses Resumption in the Fertilizer Sector
The company’s executive leader stated that the return to the fertilizer sector is related not only to the need to meet internal demand but also to the company’s strategy during the energy transition. “It is from this that new products will emerge, such as green ammonia and the fertilizers of the future, so it is crucial to capture a share of the market; we want to participate actively,” he affirmed.
Regarding the profitability of the projects, Prates emphasized the importance of diversifying the company’s activities during the energy transition and that it can take advantage of its logistical and operational capacity, as well as access to raw materials to profit from projects in this segment. **It is essential for the company to be prepared to strategically position itself in this evolving scenario.**
During the six-month period, which may be extended by another six, other options will be explored: reintegrating the plants, establishing a joint venture, seeking a third partner, or joining other projects. Additionally, there is an ongoing project for a hydrogen plant, which is generating significant interest and is being closely evaluated.
One of the alternatives considered is to use the plant in Bahia for green ammonia production intended for export, as pointed out by França.
**We will seek another solution: either take the plants back, or do a joint venture with them, or bring in a third partner, or join with other projects. There is also a project for a hydrogen plant there, which is quite interesting; we are also looking at that.**
The agreement was previously mentioned by the governor of Sergipe, Fábio Mitidieri, in an interview with the epbr studio during an event. Watch the full interview below:
Prates suggested that the tolling agreement aims to give Petrobras more time to determine the direction of the projects. **This measure is intended to allow the company to decide the future of the gas projects.**
Unigel has signed a ten-year contract to lease the industrial units. The company is facing financial difficulties and claims that the current cost of natural gas provided by the state-owned company is making it unfeasible to continue operations at the plants.
According to a company spokesperson, “The concept is not to help anyone; it is to help ourselves. The two plants are our assets. The alternative to this would be to discontinue the plants and hand them back,” he stated.
Service Agreement Between Petrobras and Proquigel
Additionally, Petrobras has also confirmed that it is in talks with Proquigel, a subsidiary of Unigel, to finalize a tolling agreement for the fertilizer facilities located in Sergipe and in Bahia.
Through this service contract, Proquigel agreed to continue paying rent to operate the plants and market urea, while Petrobras will provide natural gas for the operations. **This agreement allows both companies to mutually benefit, ensuring the continuity of operations at the fertilizer plants.**
“The goal is to complete the construction, but the method to achieve this may vary. We had discussions in China with potential partners interested in completing the project and becoming partners. This is one possibility, but we are also considering the option of completing the work on our own and then seeking partners,” Prates stated.
The Director of Industrial Processes and Products, William França, emphasized that UFN 3 has the advantage of being more efficient than other Petrobras units. “It is more profitable, producing 60% more urea with the same amount of gas. Although the projected operation is in 2028, we are working to optimize this timeline, subject to the feasibility of the operation,” França explained.
The head of Petrobras, Jean Paul Prates, also validated the intention to complete the construction of UFN 3, located in Três Lagoas, which was halted in 2014. The unit was even put up for sale during the Bolsonaro government, but without success. However, the continuity of the works will be subject to new financial evaluations.
“We are finalizing the analysis of the needs to conduct a bidding process. Subsequently, after the bidding is completed and the evaluation of responsibilities and human resources by the working group, we will decide whether to resume operations at this plant,” he stated.
França also mentioned that the company is in negotiations with a potential partner to replace the natural gas used in the production of fertilizers with gas generated from biomass, that is, biogas.
Resumption of Ansa and Fertilizer Project
The Executive Director of Industrial Processes and Products of the company, William França, shared the information during a press conference about the strategic planning for 2024-2028 on the morning of Friday, November 24.
According to França, the resumption of Ansa and the fertilizer project is expected to happen more quickly. The plant has been inactive since 2019, and the investments to restart operations are already allocated in the board’s budget, according to the new strategic plan. These resources will be primarily directed toward the maintenance of the unit. **The resumption of Ansa is a priority and is integrated into the company’s strategic planning.**
Petrobras’ strategy to return to the fertilizer production sector involves the resumption of operations at Araucária Nitrogenados S.A. (Ansa) in Paraná by the end of 2024 and the start of production at UFN 3 in Três Lagoas (MS) in 2028.
The company is also in negotiations to establish a short-term tolling contract with Unigel to make the fertilizer factories (fafens) in Bahia and Sergipe viable. In this model, the state-owned company will provide the gas and retain the fertilizers, paying only for the use of the facilities.
Source: EPBR
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