According to the purchase agreement, Grepar paid 10 percent ($3.4 million) when the contract was signed on May 25. Another $9.6 million once the transaction is completed, and the remaining $21 million will come in deferred payments.

As of Wednesday, Grepar was still waiting for the final green-light from antitrust authorities. However, all companies and potentially interested parties were notified of the transition taking place, according to Eduardo Bellaguarda, who is executive consultant at Grepar. 

To get an idea of the next steps seen in Brazil, here are some of the outtakes from an interview with Lube Report. 

How does Grepar expect the Brazilian base oil market to change in coming years?

Bellaguarda: In terms of base oils consumption, the current scenario is quite favorable in the country as we are seeing growth in the domestic market. Keep in mind, Brazil is a very large continental territory, and it has a lot of base oil demand right now.  

However, we do not have a factory that fully meets the country’s needs. As such, we have had to depend on importing products, despite being produced domestically. Today, Lubnor is the only plant that produces base oils. And considering our investment plan which includes projects to expand production, we do see great opportunities in the future. 

Grepar is highly focused on providing quality products at competitive prices so that we can achieve growth in the local market and adequately serve Brazil’s demands. With that said, we believe that the growth in imports we are seeing today is due to a repressed demand that is not being met domestically. However, this will change in the coming years.

What is Grepar’s opinion of the Petrobras divestment program?

Bellaguarda: Grepar believes strongly in the opening up of Brazil’s oil refining market. This not only strengthens the industry, it helps to further leverage our country’s overall economy and pushes investments aimed at continuous growth. 

We see the selling process of the Petrobras Refineries as an opportunity for companies to participate in competition.

Does Grepar’s Lubnor deal include the Mucuripe port terminal?

Bellaguarda: No, the acquisition of Lubnor only refers to the refinery asset. 

Have you received approval from Cade, Brazil’s antitrust authority?

Bellaguarda: Cade has notified all companies who are potentially interested parties, especially all the asphalt and lubricant distributors, as well as other refineries. It is following the normal procedures of preparing for an acquisition of this type, but Grepar is still awaiting Cade’s final decision.

Could you tell me about Grepar’s 10-year investment plan for Lubnor?

Bellaguarda: The company is estimating an investment of more than $70 million in capital goods, operational improvements and projects related to environmental, social and governance sustainability. So, with development, improvement, and the expansion of the business in mind, this is our 10-year investment plan. 

Finally, are you seeking any partnerships to help accomplish your goals?

Bellaguarda: Grepar is committed to maintaining and carrying out studies on social responsibility programs in partnership with the municipality, as well as community leaders in the vicinity of the refinery. We have prepared some guidelines for this and other initiatives, and we are in the process of mapping out an action plan, which will be announced and implemented shortly.