Petrobras Will Need To Request An Extension From Cade For The Privatization Deadlines Of Oil Refineries After The Change Of President

The Brazilian State Company Petrobras Now Has an Increasingly Tight Deadline for the Privatization of 8 Oil Refineries, Which Had Been Agreed Upon with Cade for Sale, and Will Need to Request More Time for the Completion of the Processes

Amid a changing presidency and instability in the national oil and gas market, Petrobras is experiencing delays in the sale of its oil refineries until this Friday, (06/10). Thus, the state company will need to request an extension of the deadlines for the privatization of the structures, which have been negotiated for sale since 2019 with the agency.

Privatization of Petrobras’ Oil Refineries Is Delayed and the State Company Will Need to Request an Extension of the Sale Deadlines from Cade for the Completion of the Processes

Petrobras has been facing a series of instabilities in recent months, mainly regarding contract issues, such as the supply of Bolivian gas, and the constant changes in company leadership. Amid this scenario, the privatization project for its oil refineries is increasingly delayed and lacks prospects for completion, as the state company now shifts its focus to internal management and leadership issues. 

More than 2 years after the agreement for the sale of 8 oil refineries with Cade in 2019, only 1 of the assets has been privatized and another 4 are at different stages of the process, while the others are still awaiting new decisions from the state company.

Additionally, the delay has already led the agency to revise the time limit earlier this year, but now a new round of negotiations will be necessary. This is happening because the recent changes in the presidency of Petrobras are affecting the continuity of various company projects, including the privatization of the structures. 

Now, the company will have to seek solutions with Cade as soon as possible, according to executive Gustavo Augusto de Lima, a councilor of the agency, who began his term in April and is seeking new perspectives for the oil and gas sector in Brazil. According to Lima, Petrobras will now only have three alternatives regarding the privatization of the oil refineries: extend the deadline, impose a fine for violating the deadlines established in the agreement, or wait for the reopening of the investigation against the state company for anti-competitive practices in the refining sector.

Cade Has Already Extended the Sale Deadlines for the Refineries, but the State Company Continues to Disregard What Was Agreed Upon in the Privatization of the Structures

During the month of March this year, the state company reached an agreement with Cade, which agreed to extend the deadlines for the privatization of the oil refineries. This was due to Petrobras using the internal and external economic contexts affecting the oil and gas sector in Brazil as justifications.

However, so far, the refinery closest to having its sale concluded is the Manaus refinery, which has received the green light from Cade for the process. 

Thus, Councilor Lima commented on Petrobras’ alternatives to avoid reopening the investigation and stated: “The signal we want to give is that Cade is attentive on both sides. We are committed to bringing the agreement to completion with the sale of the eight refineries, and we must be careful not to simply create a private monopoly. We will continue to supervise the sector.”

When contacted about the matter, Petrobras responded to the comments and stated that the changes in leadership are not affecting the processes and emphasized that it is continuing to work intensively to advance the privatization process of oil refineries in Brazil.