Raízen, The Giant Ethanol Producer in Brazil, Is One Step Away from Purchasing The Repar Refinery from Petrobras

Ultrapar Is Negotiating with Petrobras for the Purchase of the Refap Refinery and Leaves the Door Open for Its Competitor Raízen to Acquire Repar

Raízen, the giant ethanol producer in Brazil and owner of Ipiranga gas stations – Ultra, was in the running for the Presidente Getúlio Vargas (Repar) refinery in Paraná and the Alberto Pasqualini (Refap) refinery in Rio Grande do Sul, both up for sale by Petrobras. Hospitals in Manaus Receive Lung Ventilators Developed by USP with a Million-Dollar Investment from Petrobras and IBP

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On the 19th, Petrobras announced that it is in negotiations with Ultrapar. The negotiations between Petrobras and the Ultra Group, which already has operations in the region, for the purchase of Refap are estimated between US$ 1.2 billion and US$ 1.4 billion.

If the purchase is finalized, antitrust contract laws prohibit the company from acquiring Repar, as both refineries are in the same region, allowing its competitor Raízen of the Cosan Group to lead the bidding for one of the best refineries Petrobras has put up for sale, the Presidente Getúlio Vargas (Repar) unit.

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Raízen is a partnership between the Brazilian Cosan – strong in ethanol production – and the Anglo-Dutch Shell – owner of one of the most recognized gas station brands in Brazil. It is already refining in industries in Argentina.

Repar and Refap are the first refineries on the list of eight out of 13 that Petrobras decided to sell as part of a divestment plan announced last year.

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In addition to the refinery itself, the sale of Repar includes 476 kilometers of pipelines and 5 storage terminals. The refinery can produce 208,000 barrels per day (approximately 9% of Brazil’s refining capacity) and has distribution capabilities to other regions of the country. Moreover, Repar accounts for 12% of Brazil’s petroleum derivatives production – diesel, gasoline, LPG, aviation kerosene, for example.

Other Refineries for Sale by Petrobras

According to the state-owned company, they are awaiting final bids from all participants in the sale process of the Landulpho Alves Refinery (RLAM) in Bahia, based on the negotiated versions of the contracts with Mubadala Investment Company.

Petrobras has also received binding proposals and is in the negotiation phase for the sale of Isaac Sabbá Refinery (REMAN) in Amazonas; the Lubricants and Oil Derivatives of the Northeast (LUBNOR) in Ceará; and the Shale Industrialization Unit (SIX) in Paraná.

Petrobras also expects to receive binding proposals for the sale of the Abreu e Lima Refinery (RNEST) in Pernambuco and the Gabriel Passos Refinery (REGAP) in Minas Gerais in the first quarter of this year.