There Are More Than 20 Interested Parties in Petrobras’s First 4 Refineries, Says Castello Branco

There Are More Than Twenty Interested Parties in the First Phase of Petrobras’ Refinery Sale Program, Launched in June

There are more than two dozen interested parties in the first phase of Petrobras’ refinery sale program, said the president of the state-run oil company, Roberto Castello Branco, on Tuesday while participating in a committee in the Senate. The sales program began in June, with the offer of four units, click here to understand

“Regarding the first 4 refineries, I can say that there is great interest, the number exceeds two dozen interested parties,” he said at a public hearing in the Senate Infrastructure Committee.

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Petrobras intends to sell 8 of its 13 refineries. Together, they have a refining capacity of 1.1 million barrels per day, which represents nearly half of the entire refining capacity of the country. The goal is to complete the negotiations by 2021.

The divestment will be carried out in 2 stages. In this first phase, Petrobras plans to sell the Rnest refinery, in Pernambuco; Rlam, in Bahia; Repar, in Paraná; and Refap, in Rio Grande do Sul, as well as their corresponding logistical assets.

In July, the company initiated a non-binding phase related to this stage, when it informed that qualified potential buyers would receive a descriptive memorandum containing more detailed information about the assets in question, as well as instructions.

Four more refineries will still be put up for sale, as part of a broader divestment plan by the company that anticipates the sale of a total of eight refining units, representing half of the country’s capacity.

Castello Branco made a strong defense of the company’s divestment plan in the Legislative House. According to him, the high debt “ends up consuming resources that could generate wealth for the country.”

“To pay the debts, the revenue from divestment becomes mandatory. It is impossible to generate cash organically, as 35% of the revenue is deducted from us with interest payments,” he said.

The sale of the refineries, an important part of the company’s divestment project, was consolidated in June through an agreement with Cade (Administrative Council for Economic Defense).

To increase competition also in the gas market, the state-owned company made a second agreement, which determines the sale of its stake in companies involved in the transportation and distribution of natural gas.

The executive emphasized that a previous plan to sell refineries, launched during Petrobras’ previous management, which was unsuccessful, attracted only five interested parties, which included the BR Distribuidora, a fuel company recently privatized by Petrobras.

This time, Castello Branco emphasized that BR is not participating in the sales process and that currently, however, he noted that the company is not interested in petrochemicals, as raw material prices are not attractive.

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