Sale of Petrobras' UFN3 to a Russian company will generate 10 jobs in Mato Grosso do Sul

Petrobras' UFN3 fertilizer factory has 80% of its works completed, and when it starts activities it should generate up to ten thousand direct and indirect jobs in Mato Grosso do Sul.

With the decision of the Federal Supreme Court (STF) to authorize state-owned companies belonging to the federal government to sell their subsidiaries without the need for approval by the National Congress, Petrobras should conclude by September of this year the sale of its nitrogen fertilizer factory in Três Lagoas, in the east of Mato Grosso do Sul (UFN 3 – Petrobras Nitrogen Fertilizer Unit), to the Russian group Acron.

According to Governor Reinaldo Azambuja (PSDB), Petrobras published a public notice for the resumption of sales. “I think it's pretty far along. The CEO of MS Gás, Rudel Trindade, had a meeting this Friday, June 14th, in São Paulo with the Russians who are intending to purchase UFN3”. Acron should spend around R$8,2 billion on the deal, R$3,2 billion of which for the Brazilian state-owned company and the remainder, R$5 billion, for investment in the plant.

The governor spoke about the importance for Mato Grosso do Sul of running the factory. “For us, it matters, in addition to the resumption of investments, it is job creation and being the largest producer of urea and ammonium sulfate in Brazil. Três Lagoas will become the largest producer of these inputs”.

Once the sale of the industry is completed, the expectation is that the works for the resumption of the works can start at the end of 2019, with the perspective of taking a year and a half to complete.

Azambuja revealed a meeting scheduled for July 9 between Bolivian President Evo Morável and Russian President Vladimir Putin in Russia. “They are going to meet perhaps to sign the gas supply agreement. With the court decision, it unlocked the sales of subsidiaries and I have no doubt that UFN3 will be negotiated”.

The purchase of raw material for the production of nitrogen in Três Lagoas is taken for granted by the Bolivian and Russian sides. What is missing, according to Verruck, is to finalize the price and conditions for the purchase of the commodity.

The resumption of UFN3 is part of the Bolivian government's plan to increase the sale of natural gas to Brazil, reduced from 2016, when Petrobras began to give preference to the supply to the center-south of Brazil for the product removed from its deposits in the Pre-Salt, in the Atlantic Ocean.

When operating, the fertilizer unit in Três Lagoas will consume, on average, 2,3 million cubic meters of natural gas per month. By way of comparison, currently, in 2019, the average monthly volume of Bolivian gas imports to Brazil is 13 million cubic meters per month.

In the medium term, in addition to generating jobs in the Três Lagoas region, UFN3 operations will help the public coffers of Mato Grosso do Sul. This project plus the implementation of a thermal power plant in Corumbá (whose plans are to start operating in the next decade) will provide more stability to the government's cash flow.

Data released by the state administration at the beginning of this month indicate a reduction of R$ 13 million in the collection of Tax on Goods and Services (ICMS) with the importation of natural gas when compared to the first four months of this year and last year.

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