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 must be made taking into account the generation of value, 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 make a comparison between a pre-salt oil well and a fertilizers, the financial returns will not be the same, but this does not mean that investing in fertilizers be a loss,” he stated.
The financial and investor relations director, Sérgio Leite, highlighted that the criteria used to evaluate investments in investment projects fertilizers remain unchanged.
CEO of the state-owned company talks about recovery in the area of fertilizers
The executive leader of the state-owned company declared that the return to the fertilizers it 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 fertilizers of the future, so it is crucial to capture part of the market, we want to participate actively”, he stated.
Regarding the profitability of 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 obtain profits 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 could be extended for another six months, other options will be explored: reintegrate the plants, establish a joint venture, seek a third partner or join forces with others projects. In addition, there is an ongoing project for a hydrogen plant, which is of great interest and is being closely evaluated.
One of the alternatives considered is to use the Bahian plant to produce green ammonia for export, as pointed out by França.
**Let's look for another solution: either incorporate [take the plants back], or do a joint venture with them, or bring in a third partner, or join with others projects. There is also a project for a hydrogen plant there, which is very interesting, we are also looking at it**
The pact was previously mentioned by the governor of Sergipe, Fábio Mitidieri, in an interview with the epbr studio during an event. See the full interview below:
Prates suggested that the tolling agreement is intended to provide Petrobras with more time to determine the direction of projects. **This measure aims to allow the company to decide the fate of gas projects.**
A Unigel 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 supplied by the state-owned company is making it unfeasible for the factories to continue operating.
According to a company spokesperson, “The concept is not to help anyone, it is to help us. Both plants are our assets. The alternative to that would be to discontinue the plants, return them,” he said.
Service provision agreement between Petrobras and Proquigel
Furthermore, Petrobras also confirmed that it is in talks with Proquigel, a subsidiary of Unigel, to close a tolling agreement for the fertilizers located in Sergipe and Bahia.
Through this service provision agreement, Proquigel agreed to continue paying the rent to operate the factories and sell urea, while Petrobras will supply natural gas for operations. **This agreement allows both companies to benefit from each other, ensuring the continuity of the operations of the fertilizers.**
“The objective is to complete the work, but the method for this may vary. We had discussions in China with potential partners interested in completing the project and becoming partners. This is a possibility, but we also considered the option of completing the work on our own and then looking for partners”, said Prates.
The director of industrial processes and products, William França, emphasized that UFN 3 has the advantage of being more efficient than other units in the company. Petrobras. “It is more profitable, producing 60% more urea with the same amount of gas. Although the operation is expected to be in 2028, we are working to optimize this deadline, subject to the viability of the operation”, explained França.
The head of Petrobras, Jean Paul Prates, also validated the intention to complete the construction of UFN 3, located in Três Lagoas, which were stopped 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 assessments.
“We are finalizing the analysis of needs to carry out a bidding process. Subsequently, after the completion of the tender and the assessment of responsibilities and human resources by the working group, we will make the decision to resume operations at this plant”, he stated.
França also mentioned that the company is in negotiations with a possible partner to replace the natural gas used in the production of fertilizers by gas generated from biomass, that is, biogas.
Resumption of Loop and Project Fertilizers
The company's executive director of industrial processes and products, William França, shared the information during a press conference on strategic planning 2024-2028 on the morning of Friday, November 24.
According to França, the resumption of Ansa and the fertilizers are expected to happen more quickly. The plant has been inactive since 2019, and the investments to restart the operation are already allocated in the board's budget, according to the new strategic plan. These resources will be mainly directed towards the maintenance of the unit. **The resumption of Ansa is a priority and is integrated into the company's strategic planning.**
The Petrobras to return to the production sector fertilizers involves the resumption of operations of Araucária Nitrogenados SA (Ansa) in the Paraná until 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 agreement with Unigel, in order to make production factories viable fertilizers (fafens) from Bahia quality Sergipe. In this model, the state-owned company will supply the gas and retain the fertilizers, paying only for the use of the facilities.
Source: EPBR
