MOSCOW (MRC) -- Brazil’s state-controlled oil company Petroleo Brasileiro may extend the deadline for potential bidders for a 60 percent stake in four refineries to sign non-disclosure agreements, a person with knowledge of the matter said, reported Reuters.
A ruling from Supreme Court Justice Ricardo Lewandowski this week requiring Congress to approve all sales programs of state-controlled companies threw up another roadblock to the effort to sell the refineries, which had attracted only lackluster interest from potential buyers.
Petrobras did not respond to requests for comment.
The deadline for potential buyers to sign nondisclosure agreements for the refinery partnerships - a first step in the sale process that does not signal firm interest - had been set for next Monday, July 2, but the person said it may be extended.
In a securities filing released on June 18, Petrobras said that five companies had signed nondisclosure agreements, a step that allows them to access more detailed information about the refineries.
Reuters reported last month that Petrobras’ decision to cut diesel prices in response to a truckers’ protest was spooking potential refinery buyers.
Brazilian conglomerate Ultrapar Participacoes SA, Cosan SA Industria e Comercio and Cepsa SA, an energy company controlled by sovereign wealth fund Mubadala Development Co, are among the five companies that signed non disclosure agreements, one source with knowledge of the matter said.
Another source said Petrobras hopes to get more potential bidders to sign non-disclosure agreements before proceeding to the next phase of the refineries sale.
Despite the Lewandowski decision, which has cast a pall over efforts to sell Brazilian state assets in general, a third source within the oil company said it still intends to sell the refineries and is working to conclude the process, as approved by the board.
The refineries are expected to be sold in two regional blocks: one in Brazil’s northeast and another in the southern region of the country. Each refinery cluster Petrobras put up for sale has earnings before interest, tax, depreciation and amortization (EBITDA), a common gauge of operating profits, of USD1 billion, according to a fourth person with knowledge of the process.
As MRC wrote before, in October 2017, Petrobras’s minority stakes in Braskem and Deten Quimica was excluded from Petrobras’s divestment program, according to a government decree published in Brazil’s Official Gazette. The decree prevented Petrobras from immediately selling its minority stake in Braskem, which had been announced last year. A new decree will be required to release the stock sale.
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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