Petrobras Proceeds with Sales, Group II Project

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After delays caused by the coronavirus pandemic, Petrobras is moving forward again with plans to divest several oil refineries – including one that includes a base oil plant – and the company has also announced funding for a project that would develop its first API Group II plant.

The state-owned energy company has received binding offers to purchase three refineries, including the Northeast Lubricants and Derivatives facility in Fortaleza, officials said during an online presentation to investors Tuesday. Lubnor has capacity to make 1,290 barrels per day of naphthenic base stocks.

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Petrobras resolved in 2018 to sell eight of its refineries – representing half of its refining capacity – as a way of raising money and encouraging privatization of its refining industry, and it began taking offers for the facilities in 2019. But a number of bidders had to refashion those offers earlier this year after the rise of COVID-19, which caused a crash in global oil prices.

The company has already proceeded to exclusive negotiations with Mubadala Investment Co., of the United Arab Emirates, for the sale of the Landulpho Alves refinery in Mataripe, which includes a 1,750 b/d Group I plant. Earlier this year Petrobras and the administration of President Jair Bolsonaro also faced a challenge to the divestment plan from Brazil’s legislature, but the country’s top court ruled in October that the sales could proceed.

Officials also said during Tuesday’s presentation that the company will invest U.S. $490 million to build a catalytic hydrocracker at the GasLub natural gas processing facility under construction at Itaborai. That unit would allow the facility to make clean diesel as well as Group II base stocks and other products. The company previously discussed plans to build the unit but had not mentioned a price tag.

Officials still did not disclose a timeline for the project, but the company has previously said that divestment of its refineries was a more immediate priority. The company has also said that it plans to integrate GasLub with its Duque de Caxias refinery near Rio de Janeiro, one of six refineries that it aims to keep.

The GasLub project was previously known as Comperj (Complexo Petroquimico do Rio de Janeiro) but the company renamed it earlier this year to break with negative perceptions that attached to it during the Car Wash corruption scandal. The project has been under construction since 2008 but work was long by government investigations that uncovered massive bribery involving contracts for the project.

Petrobras is now seeking to finish it in cooperation with outside partners.