MOSCOW (MRC) -- Brazil's state-controlled oil company Petroleo Brasileiro SA said Tuesday it will exit the biofuels sector, as the heavily indebted company seeks to prioritize investment in crude oil and gas production, reported Reuters.
Petrobras, as the company is known, said biofuels would be one sector it plans to unload as part of sweeping asset sales plan. The company reaffirmed a USD15.1 B in asset sales for the 2015-2016 period and fetch an additional USD19.5 B through divestments and partnerships between 2017 and 2018.
Petrobras has a significant portfolio in biofuels. No specifics were provided on what years the sales were planned for.
Its largest asset is a 45.9% stake in Guarani Tereos Acucar e Energia Brasil, which owns seven mills with a combined production capacity of 1.7 MMt of sugar and 900 MM liters (237.8 MM gallons) of ethanol per year.
Petrobras also owns 49% of Boa Vista mill in Goias state, a joint venture with Brazilian sugar and ethanol company Sao Martinho, and a 40% stake in the Bambui mill in the Sao Paulo state.
Petrobras also fully owns three biodiesel plants in Minas Gerais, Bahia and Ceara states and has a 50% stake in local biodiesel producer BSBIOS, which manages two large plants in the states of Parana and Rio Grande do Sul.
Sugar and ethanol prices have recovered strongly since Petrobras since the media began reporting the company planned to leave the biofuels sector early last year. Raw sugar prices hit the highest level since 2012 on Monday in New York, lifted by expectations of at least two years of a global supply deficit.
As MRC wrote before, Petrobras is seeking to sell its 5.8 billion Brazilian real (USD1.4 billion) stake in petrochemical producer Braskem SA. Petrobras owns a 36% stake in Braskem, Latin America's largest petrochemical producer. The sale would help Petrobras meet its target of selling USD15.1 billion worth of assets in 2015-16, a key part of its plan to cut debt as oil prices plunge to 12-year lows.
Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
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