Brazil’s Petrobras Lubnor refinery disposal going ahead as planned – buyer

SAO PAULO (ICIS)–The divestment by Brazil’s energy major Petrobras of its Lubnor refinery in the northeast to Grepar Participacoes is expected to conclude by 1 August as initially planned, the buyer said to ICIS.

Grepar is expected to pay, in total, $54m for the refinery located in Mucuripe, in the municipality of Fortaleza in the Ceara state.

Among others, the refinery produces base oils, used to produce finished lubes and greases for automobiles and other machinery.

Last week, speaking to journalists in Rio de Janeiro, Petrobras’ CEO said the Lubnor divestment might be reviewed because of land ownership issues where the facility is located, according to Brazilian daily O Estado de S. Paulo, which is also known as Estadao.

In a written response to ICIS late on Monday, a spokesperson for Grepar said the company had not been informed by Petrobras it would publicly question the divestment.

It added, “We understand that the Petrobras CEO’s statement meant the company is checking internally, as provided for in the contracts signed with Grepar, the clauses that address Lubnor’s land issues.”

“This situation was already known to the parties: Grepar, Petrobras, and the City Hall. Negotiations with the City Hall are still underway regarding the assignment of the land use contract for the Mucuripe [Lubnor] refinery (which is a legal possibility) or whether the City Hall is interested in selling this area.”

The spokesperson added that “meetings are taking place normally” between Petrobras and Grepar in the negotiations for this transaction.

Brazil’s new administration under President Luiz Inacio Lula da Silva wants Petrobras to suspend any divestment while the government works on a “reassessment” of its energy policy.

In 2022, Petrobras agreed to sell its Lubnor refinery and its associated logistics assets to Grepar Participacoes for $34m.

The spokesperson clarified the initial purchase price was still valid, but it would be complemented by “around $20m” comprising other obligations between Grepar and Petrobras.

“So, the total amount paid by Lubnor is around $54m, without adding the value of the land that is still under negotiation,” the spokesperson said.

Petrobras had not responded to a request for comment at the time of writing.

Clarification: Re-casts introduction to clarify the transaction’s expected conclusion date