Petrobras on fertilizer plant mothballing

January 14, 2020

Petróleo Brasileiro S.A. – Petrobras reports that it has approved the mothballing of the fertilizer plant of its wholly owned subsidiary Araucária Nitrogenados S.A. (ANSA),
located in the state of Paraná.

ANSA has been posting recurring losses since it was acquired in 2013. From January to September 2019, the company posted a loss of about R$ 250 million and the projection for 2020 is a loss of over R$ 400 million. In the current market context, the raw material used in the plant (asphalt residue) is more expensive than its end products (urea and ammonia).

Petrobras has endeavored every effort to sell the company, whose divestment process started more than two years ago, but negotiations with the Russian company Acron Group ended with no deal, as disclosed to the market on November 26, 2019.

The plant will remain mothballed under conditions that ensure full operational and environmental safety, as well as the equipment integrity.

The decision is in line with Petrobras’ strategic positioning to fully exit the fertilizer business and aligned with the portfolio optimization and improved capital allocation.

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