Sale of Petrobras’ Lubnor Delayed

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Petrobras said recently that the COVID-19 pandemic has delayed its efforts to sell a naphthenic base oil plant in the Brazilian state of Ceara, but the company still expects to divest the facility next year.

Local news website Diario do Nordeste reported Monday that the state-owned oil company has decided to postpone the acceptance of offers for Lubrificantes e Derivados do Nordeste because of complications caused by countermeasures aimed at containing the disease.

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During a July 31 conference call about the company’s second quarter financial performance, officials said the coronavirus has delayed the sale of more than one of the eight refineries that it is divesting, but they maintained that they still expect all to be sold before the end of 2021. CEO Roberto Castello Branco said the company is still finding parties interested in bidding for all of the refineries but that some have asked for time to restructure agreements with lenders.

Brazil’s government decided to sell off Lubnor and seven other refineries in order to raise money and to encourage private development of the nation’s energy sector. Lubnor, which is located in the city or Fortaleza, has capacity to produce 1,290 barrels per day of naphthenic base oils, as well as asphalt.

The divestment process continues to move forward for some other sites, including the Landulpho Alves fuels refinery in Mataripe, which includes a base oil plant with capacity to make 1,750 b/d of API Group I stocks. Petrobras received offers for that refinery from several companies this month. Multiple news organizations have reported that bids were submitted from international companies such as Chinese oil giant Sinopec, United Arab Emirates investment fund Mubadala and Indian refiner Essar. Petrobras said it expects to complete the sale of some refineries this year.

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