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Petrobras ends talks to sell Refap refinery

October 04/2021

MOSCOW (MRC) -- Brazil's state-run oil company Petrobras, formally known as Petroleo Brasileiro SA, said on Friday it had halted talks with Brazilian conglomerate Ultrapar on the sale of the state-run oil company's Refap refinery, part of its program to sell eight plants, reported Reuters.

The company said it would relaunch the process of selling Refap in the future but did not provide a date.

"Despite the efforts made by both companies in this process, certain critical conditions were not met for an agreement," Petrobras said in a securities filing, adding there would be no penalties for either party.

Credit Suisse analysts said the ending of the process was negative for Petrobras, as failing to divest refineries increased the downstream price risk.

"(It is) marginally negative for Ultrapar as it loses that potential catalyst in the case, but also reduces risk," Credit Suisse added in a research note.

As MRC wrote before, Petrobras had announced in January that Ultrapar was leading the talks to acquire the asset, but three people close to the deal told Reuters at the time that the state-run firm was trying to push the conglomerate to boost its offer.

We remind that in August 2021, Petrobras hired JPMorgan Chase & Co as an advisor to sell its stake in the petrochemical company Braskem SA.

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 the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,396,960 tonnes in January-July 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.

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.


mrcplast.com
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, propylene, ethylene, petrochemistry, Braskem, Petrobras, Brazil, USA.
Category:General News
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