Petrobras Agrees to Sell Lubnor Refinery


Petrobras announced last week an agreement to sell its Lubnor refinery in Fortaleza, Brazil, to a consortium of companies including asphalt supplier Greca Asfaltos for U.S. $34 million.

Formally named Lubrificantes e Derivados de Petroleo do Nordeste, Lubnor is one of eight refineries that state-owned Petrobras has been working three years to divest and includes a naphthenic base oil plant.

Get alerts when new Sustainability Blog articles are available.


The purchaser in the transaction is Grepar Participacoes Ltda., a consortium of Greca Asfaltos, private equity firm Grecor Investimentos em Participacoes Societarias and Holding Participacoes SA, which distributes asphalt, fuel oil and chemicals to the road paving industry.

Located on Brazil’s northeast coast, in the state of Ceara, Lubnor is a niche refinery with capacity to process 10,400 barrels of crude oil per day. Half of its output is asphalt, and 20% – 1,290 b/d – is naphthenic base oils, while the remainder is dark fuel oil.

None of the consortium partners are in the base oil or lubricants business, but they claim to be interested in the base oil operation.

“We intend to keep the refinery open with its current portfolio, seeking new business opportunities to meet market demands and projects that create synergy with Lubnor,” Karoliny Jordao, a communications and marketing official with Greca Asfaltos, told Lube Report.

The Lubnor sale is part of a program launched in 2019 by President Jair Bolsonaro’s administration, which committed to shedding half of Petrobras’ refining capacity in order to raise money and encourage competition. The initiative has encountered delays, partly because the COVID-19 pandemic disrupted financing plans of companies that bid to buy the refineries.

Petrobras has now announced agreements to sell four of the eight refineries in the divestment program. Lubnor is the second to include a base oil plant; earlier this year United Arab Emirates investment firm Mubadala closed on its purchase of Refinaria Landulpho Alves, which is located in Sao Francisco do Conde, in Bahia state, and has since been renamed Refinaria Mataripe. Mataripe’s base oil plant has capacity to make 1,750 b/d of paraffinic API Group I base stocks.

Officials from Petrobras and the consortium said the Lubnor sale will spur market competition.

“This is a significant milestone for Brazil, for Ceara, for the refining market and for Petrobras,” consortium Managing Partner Clovis Fernanda Greca said in a news release published by Petrobras. “We believe that Lubnor will be the beginning of a new cycle of opportunities, in a sector that we intend to grow and invest in new partnerships, respecting the ESG [environmental, social and governance sustainability] context in which the company is inserted, especially in Ceara.”

Grepar paid $3.4 million as a guarantee of its purchase and is due to pay $9.6 million more when the deal closes. The transaction calls for the remaining $21 million to be paid in deferred installments.

The transaction must be approved by Brazil’s Administrative Council for Economic Defense and also faces a challenge from the Fortaleza’s municipal government, which sued to annul the deal or to receive compensation since the city owns 30% of the property to be conveyed under the agreement.

Related Topics

Base Stocks    Brazil    Business    Market Topics    Mergers & Acquisitions    Region    South America