Lubnor Sale Sent Back for Review

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Last year’s purchase of the Lubnor refinery by Grepar Participacoes will be reviewed by a Brazilian court after a judicial official advised last week that the deal warrants scrutiny for its impacts on the country’s asphalt industry.

Refinaria Lubrificantes e Derivados do Nordeste (translated as Northeastern Lubricants and Derivatives Refinery) is one of three refineries that state-owned Petrobras divested under a program by the administration of former President Jair Bolsonaro to introduce competition to the oil sector and to raise money for the government.

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Lubnor, which is located in the Ceara state in the city of Fortaleza, is one of two of those refineries that include base oil plants. Lubnor’s base oil plant has capacity to produce 1,290 barrels per day of naphthenic base stocks.

Grepar – an asphalt consortium led by Greca Asfaltos, which is based in Araucaria, Brazil – entered an agreement to buy the refinery in May, but the deal has yet to close because it has not been approved by competition authorities.

Objections were raised by several asphalt companies and associations that claimed the transaction would reduce competition in the industry. Brazil’s Court of the Administrative Council for Economic Defense initially denied those concerns, but Victor Oliveira Fernandes, counselor to the court, stated Jan. 4 that a better analysis was needed of the impact that Grepar’s acquisition would have on the asphalt industry.

Bolsonaro was succeeded this month by Luiz Inácio Lula da Silva, who defeated him in a close election late last year. Lula has vowed to stop selling off government businesses but has not spoken of reversing deals already agreed to.

Grepar officials have said that they wanted to acquire Lubnor partly because of its asphalt production but have stated that they are also interested in the base oil operation and plan to invest in it.

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