Petrobras suspends refinery sales

Brazil's state-controlled Petrobras has postponed the receipt of binding offers for its domestic refineries as the oil price crash and coronavirus drastically alter market conditions.

Company executives had said initial sales agreements for some of the refineries could be announced as early as April. The company did not say when the process would resume.

The downstream divestment portfolio covered eight refining units with around 1.1mn b/d of installed capacity, most located in the south and north of Brazil.

Fuel distributor Ipiranga, a subsidiary of Brazilian conglomerate Ultrapar, and Raizen, a joint venture between Brazil's Cosan and Shell, are among the firms evaluating the assets. China's state-owned Sinopec has also been evaluating refinery projects in Brazil.

Brazil's anti-trust watchdog Cade had obligated Petrobras to divest downstream assets by the end of 2021 to increase competition in the sector. It was not clear if that deadline would also be extended.

The eight refineries and connected logistics were a large part of the $20bn-$30bn Petrobras planned to raise from non-core assets sales in 2020-24, according to its $75.7bn five-year spending plan.

The company has now requested that lenders disburse around $8bn from revolving credit lines to boost liquidity while it evaluates other measures that reinforce its cash flow, including cost reductions and optimization of working capital.

A 22 April shareholder meeting has been convened at the company's Rio headquarters to consider 2020 capital spending, among other matters.

Earlier this week, Petrobras extended a deadline for expressions of interest for its 51pc stake in gas distribution subsidiary Gaspetro by 30 days. Upstream sales processes—including the divestment of stakes in the Pelotas and Espirito Santos basins—have yet to be affected.

Yesterday Petrobras announced it would cut staff at offshore production platforms to a minimum.

By Nathan Walters

News No: 8796
Date: 2020/03/20 - 20:46
News Source: Argus Media

Petrobras  refinery  Brazil  coronavirus  market 


Leave a Comment:


President Orders Special Support for Iranian Businesses

Iranian President Hassan Rouhani earmarked 750 trillion rials in financial aid for the businesses keeping their employees amid the outbreak of the coronavirus.

Fujairah storage nears capacity

Crude and oil product storage is filling up fast in the Middle East's hub of Fujairah, UAE, because of lack of demand caused by the coronavirus pandemic.

Coal India faces growth plan review

State-controlled mining firm Coal India's (CIL) ambitious output growth plans face a review after recording its first fiscal year-on-year drop in output in around 20 years, with the demand outlook equally clouded because of the impact of the coronavirus pandemic.

China’s air traffic starts to recover in March

Commercial air traffic in China picked up in March from a month earlier, but was still down by more than half from levels before the coronavirus outbreak, China's civil aviation administration (CAAC) said.

Dahej LNG terminal utilisation rates set to slump

Utilisation rates at India's largest LNG receiving terminal, the 17.5mn t/yr Dahej facility, are expected to dip further next week after they fell below 50pc this week from around 70pc at the end of last week. Rates have fallen as gas consumption has taken a sharp hit following the Indian government's restrictions on business and industrial activity and road travel to halt the spread of the coronavirus.

Brazil gasoline retailers look to domestic market

The sharp fall in Brazilian gasoline consumption is prompting risk-adverse independent retailers and traders to considerably reduce import operations and rely more on domestic output.
Upcoming Events
 Mines & Metals

Mine & Business Today

 Scrap & Recycling


Our partners