Brazil’s Petrobras re-enters fertilizers sector with restart at ANSA plant

SAO PAULO (ICIS)–Petrobras is to restart its large-scale ANSA fertilizers plant in Araucaria, state of Parana, which has been idle since 2020, the Brazilian state-owned energy major said late on Wednesday.

The company did not disclose the date it intends to restart production but said as soon as “next week” technicians would work at the site to establish what repair or upgrading work is necessary to restart the facilities.

The facilities are called Araucaria Nitrogenados SA (ANSA), a wholly owned Petorbras subsidiary. They are located next to Petrobras’ Presidente Getulio Vargas Refinery (REPAR).

Production capacities stand at 720,000 tonnes/year of urea, 475,000 tonnes/year of ammonia, and 450,000 cubic meters/year of the so-called ARLA urea, an additive added to diesel engines to reduce the emission of polluting gases.

“In view of the review of the company’s strategic guidelines approved last year, investment in fertilizers production is once again part of Petrobras’ portfolio,” said the company.

Petrobras new CEO, Jean Paul Prates, was appointed by President Luiz Inacio Lula da Silva in January 2023, when he started his term. Unlike the prior Administration, Lula wants Petrobras to play a more active role in the economy.

Lula has repeatedly said Brazil needs to increase fertilizers production to lessen its dependence on imports – the country’s trade deficit in fertilizers is large as its agricultural output has become on of the largest in the world. Agriculture is now a quarter of Brazil’s economy.

Moreover, the significant producer of fertilizers in the country, Unigel, has paused production on two large-scale fertilizers plant due to high natural costs while it negotiates with its creditors a debt restructuring.

The two plants were a 10-year lease from Petrobras signed in 2019.

Meanwhile, Unigel and Petrobras have been involved in negotiations to help the former restart its plants, but an agreement signed in December is now under scrutiny. All in all, the two plants remain idle.

This week, Petrobras said its “re-entry” into the fertilizers sector would first focus on “assets that already belong” to it.

Front page picture: Petrobras’ facilities in Aracaura, state of Parana 
Source: Petrobras