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Petrobras to sell its RLAM refinery to Mubadala Capital for USD1.65 bln

March 29/2021

MOSCOW (MRC) -- Petroleo Brasileiro SA has signed the contract to sell its RLAM refinery to Abu Dhabis Mubadala Capital for USD1.65 billion, in a victory for outgoing Chief Executive Roberto Castello Branco, reported Reuters.

Earlier on Wednesday, Petrobras said its board had authorized the sale to Mubadala Capital, under the aegies of its MC Brazil Downstream Participacoes unit.

Petrobras is currently selling off eight refineries in a bid to reduce debt. It is also attempting to break its own virtual refining monopoly in Brazil, which has proved a major issue as the company has come under frequent political pressure to lower domestic fuel prices.

Brazilian President Jair Bolsonaro fired Castello Branco after the company hiked fuel prices several times. It is not clear if the incoming administration at Petrobras, set to take office in April, will be as committed to selling downstream assets.

The sale of the refinery must still be approved by Brazils Administrative Council for Economic Defense (CADE), a regulator, Petrobras said. The company announced the sale in principal in February, but its approval by the board - which itself will experience major changes in April - was a key step.

As MRC informed before, Brazil's state-run oil company Petrobras is seeking 800 million reais (USD152 million) in compensation from engineering group Odebrecht in arbitration proceedings over its alleged violation of the shareholders agreement in petrochemical company Braskem.

We remind that Petrobras may need more than a year to divest its stake in Braskem, said Andrea Almeida, Petrobras CFO, in early July, 2020. She said during the company"s recent webinar that Petrobras plans to give more time for potential investors to make offers for the company"s assets, including for its refineries and stakes at its petrochemical and fuel distribution affiliates. The divestment of Petrobras"s stake in Braskem in 2020 would be desirable but "might not be possible" as the COVID-19 pandemic has changed market conditions, she said. The company plans to close part of its refinery sales in 2021. In December, Roberto Castello Branco, CEO of Petrobras, said that he wants to sell the company"s stake in Braskem within a year. Petrobras owns 32.15% of Braskem.

We also remind that Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem"s back burner for several years.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.

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.
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, PP block copolymer, homopolymer PP, propylene, LDPE, HDPE, ethylene, petrochemistry, Braskem, Petrobras, Brazil, Russia, USA.
Category:General News
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