Petrobras CEO signs new bolder program for sale of refineries

January 29, 2019

SÃO PAULO, Brazil (Reuters) – Petrobras is determined to dispose of assets in Brazil’s refining sector, where it has a virtual monopoly, and the idea is not to restrict the process, either in terms of buyers or in terms of geography or participation. be negotiated, the president of the state-owned company, Roberto Castello Branco, said on Tuesday.

“We do not want to get caught up in a timid program, such as selling 60 percent of clusters … restricting buyers. Anyone can enter, “said the executive, attending a Credit Suisse event in São Paulo.

“Selling refineries is not only good for Petrobras. We will stop being the address where people knock on the door to complain about the price of gasoline, diesel, “he added.

Under previous management, Petrobras had launched a plan last year to sell 60 percent of the company’s stake in refining and logistics assets in the Northeast and South of the country.The sale process had been suspended, following an injunction by Minister Ricardo Lewandowski of the Federal Supreme Court (STF), whereby the sale of shares of public companies would depend on legislative endorsement.

But in the middle of this month, Petrobras said it would resume the sale process, supported by an assessment by the Federal Attorney General’s Office (AGU), which understands that the company meets the requirements analyzed by the STF itself to dispose of subsidiaries.

According to Castelo Branco, the completion of the transactions will still reduce questions about the company’s fuel price policy, which has been heavily criticized following a historic truck drivers’ strike in May last year.

“I do not want to hear this expression- ‘ah, the price policy’… There is no pricing policy, we want to have a vibrant market, competition, “he said.


Regarding the other divestments, the executive stressed that there is a window of opportunity now and that the company will enjoy.

“We are going to be quick, make several deals and signaling that Petrobras is on the right track, it is on the path of deleveraging, optimizing the invested capital,” he said.

Petrobras management has faced in recent years numerous lawsuits that delayed its attempts to sell assets. Castello Branco said that the company has had favorable decisions in this regard in 2019 and that the judiciary understood the challenges that the company faces.

“We believe there is safe ground to pursue these businesses,” he said.

In a possible specific divestment, Petrobras was awaiting the conclusion of Lyondellbasell negotiations, which could buy Odebrecht’s stake in Braskem, to assess whether it would sell its stake as well. However, on Tuesday, the executive signaled that he could dispose of his stake in the asset. According to him, petrochemicals is not in the future plans of the company.

Since taking office in January, Castello Branco has stressed that he will focus on essential assets, which are exploration and production of oil, in ultra-deep waters


The president of Petrobras reiterated that both the company and the government have an interest to conclude renegotiation of the contract known as the Transfer of Rights Assignment, which ceded to Petrobras in 2010 the right to produce up to 5 billion barrels of oil equivalent oil in certain areas of the pre- salt.

At the time, Petrobras paid the government 74.8 billion reais. But a renegotiation of value was expected as soon as the areas were declared commercial, which occurred until the end of 2014. “For both Petrobras and the government there is an interest in completing this negotiation in as short a time as possible, if possible in 30, 60 days,” he said, without giving a specific deadline.

“Some of the more controversial points have already been agreed and I think there is a huge opportunity to move very quickly … and auction the surplus of the on assignment, Petrobras is ready to analyze and participate in those fields”.

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