Petrobras likely to extend deadline in refineries sale

Petrobras oil company headquarters is pictured in Rio de Janeiro, Brazil.

SAO PAULO: Brazil’s state-controlled oil company Petroleo Brasileiro may extend the deadline for potential bidders for a 60% stake in four refineries to sign non-disclosure agreements, a source said.

A ruling from Supreme Court Justice Ricardo Lewandowski this week requiring Congress to approve all sales programmes of state-controlled companies threw up another roadblock to the effort to sell the refineries, which had attracted only lacklustre interest from potential buyers.

Petrobras did not respond to requests for comment.

The deadline for potential buyers to sign nondisclosure agreements for the refinery partnerships – a first step in the sale process that does not signal firm interest – had been set for next Monday, July 2, but the source said it may be extended.

In a securities filing released on June 18, Petrobras said that five companies had signed non-disclosure agreements, a step that allows them to access more detailed information about the refineries.

Brazilian conglomerate Ultrapar Participacoes SA, Cosan SA Industria e Comercio and Cepsa SA, an energy company controlled by sovereign wealth fund Mubadala Development Co, are among the five companies that signed non-disclosure agreements, another source said.

Another source said Petrobras hopes to get more potential bidders to sign non-disclosure agreements before proceeding to the next phase of the refineries sale.

Despite the Lewandowski decision, which has cast a pall over efforts to sell Brazilian state assets in general, a third source within the oil company said it still intends to sell the refineries and is working to conclude the process, as approved by the board.

The refineries are expected to be sold in two regional blocks: one in Brazil’s north-east and another in the southern region of the country.

Each refinery cluster Petrobras put up for sale has earnings before interest, tax, depreciation and amortisation, a common gauge of operating profits, of US$1bil, according to a fourth source. — Reuters

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