Petrobras cancels sale of LUBNOR Refinery
Petrobras, Brazil's state-controlled oil company, has announced the termination of its contract for the sale of the Lubrificantes e Derivados de Petróleo do Nordeste (LUBNOR) Refinery, along with its associated logistical assets.
The specific details about the buyer who did not meet the conditions leading to the sale's cancellation were not publicly disclosed.
The decision, made public following previous announcements on June 22, 2023, and February 8, 2023, was due to the non-fulfillment of established Conditions Precedent by the final deadline of November 25, 2023. Despite Petrobras' efforts to conclude the transaction, the necessary conditions were not met, the company said.
Situated in Fortaleza, Ceará, LUBNOR is a key player in Brazil's refining sector. With a processing capacity of 8,200 barrels per day (bpd), LUBNOR is a national leader in asphalt production. It holds the distinction of being the only refinery in Brazil that produces naphthenic base oil, contributing significantly to the country's industrial and energy landscape.
The company has reaffirmed its commitment to the operational continuity of LUBNOR, ensuring the reliability and availability of its units. Petrobras remains dedicated to maintaining safety standards and showing respect for both the environment and people involved in its operations.
Petrobras had announced its intention to sell LUBNOR as part of its divestment strategy. This was in line with the company's broader plan to sell eight of its refineries, representing about 50% of Brazil's refining capacity. This strategy is a key part of the company's broader efforts to restructure and refocus its business.
One of the primary goals of Petrobras' divestment strategy is to reduce its substantial debt burden. The company has been one of the most indebted oil firms globally, and selling assets is a way to improve its balance sheet.
Petrobras aims to concentrate on its most profitable core activities, particularly deep-water and ultra-deep-water oil exploration and production. Divesting from less profitable or non-core assets allows the company to allocate resources more efficiently.
By divesting certain assets, Petrobras seeks to become a more efficient and competitive company, better positioned to face the challenges of the global energy market.