Brazil’s state-owned oil and gas company, Petróleo Brasileiro SA (Petrobras) announced its plan to exit the biofuels sector as part of its effort to unload assets as the company struggles with a huge debt load.
Petrobras’ largest asset is a 45.9% stake in Guarani Tereos Açúcar e Energia Brasil, which owns seven mills with a combined production capacity of 1.7 million tonnes of sugar and 900 million litres of ethanol per year.
Petrobras also said it will reduce its investments by 25% to USD74.1 billion between 2017-2021. It will also sell USD19.5 billion in assets in the next two years after selling USD15.1 billion in the last two years, which recently included the sale of its gas pipeline unit, Nova Trasportadora do Sudeste SA for an estimated USD5.2 billion.
The biofuels, liquefied natural gas (LNG) and fertilizer units, as well as stakes in petrochemical ventures, are among the assets slated for sale. Petrobras also plans to restructure its power unit and reposition its lubricants business to focus on oil and gas production.
Petrobras said it would reduce operating expenses by 18% to USD126 billion over the next five years.
Petrobras’ business plan calls for increasing oil production from 2.62 million barrels per day (bpd) to 3.41 million bpd by 2021.