Petrobras suspends refinery sales

  • Market: Crude oil, Oil products
  • 20/03/20

Brazil's state-controlled Petrobras has postponed the receipt of binding offers for its domestic refineries as the oil price crash and coronavirus drastically alter market conditions.

Company executives had said initial sales agreements for some of the refineries could be announced as early as April. The company did not say when the process would resume.

The downstream divestment portfolio covered eight refining units with around 1.1mn b/d of installed capacity, most located in the south and north of Brazil.

Fuel distributor Ipiranga, a subsidiary of Brazilian conglomerate Ultrapar, and Raizen, a joint venture between Brazil's Cosan and Shell, are among the firms evaluating the assets. China's state-owned Sinopec has also been evaluating refinery projects in Brazil.

Brazil's anti-trust watchdog Cade had obligated Petrobras to divest downstream assets by the end of 2021 to increase competition in the sector. It was not clear if that deadline would also be extended.

The eight refineries and connected logistics were a large part of the $20bn-$30bn Petrobras planned to raise from non-core assets sales in 2020-24, according to its $75.7bn five-year spending plan.

The company has now requested that lenders disburse around $8bn from revolving credit lines to boost liquidity while it evaluates other measures that reinforce its cash flow, including cost reductions and optimization of working capital.

A 22 April shareholder meeting has been convened at the company's Rio headquarters to consider 2020 capital spending, among other matters.

Earlier this week, Petrobras extended a deadline for expressions of interest for its 51pc stake in gas distribution subsidiary Gaspetro by 30 days. Upstream sales processes—including the divestment of stakes in the Pelotas and Espirito Santos basins—have yet to be affected.

Yesterday Petrobras announced it would cut staff at offshore production platforms to a minimum.


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19/04/24

Limited strike on Iran opens door to de-escalation

Limited strike on Iran opens door to de-escalation

Dubai, 19 April (Argus) — A limited aerial assault on the central Iranian city of Isfahan earlier today could mark the beginning of the end of the latest escalation in the Mideast Gulf. Iranian state media reported in the early hours of Friday, 19 April, several explosions over Isfahan at 04:00 local time. These were later confirmed by the Iranian military to have been the result of air defences bringing down three small drones over the city. Isfahan is the home to a number of strategically important facilities, among them the Shekari airbase that houses some of Iran's F-14 Tomcat fighter planes and SU-24 Sukhoi bombers, and a uranium conversion facility. There was "no impact or damage" to either, according to Iranian army commander-in-chief Seyyed Abdolrahim Mousavi. Other Iranian officials also sought to downplay the strike. Hossein Dalirian, spokesman for Iran's National Center for Cyberspace, said on social media platform X that it was so minor "it would not be considered an attack anywhere in the world." Ice Brent crude futures rose by nearly $3/bl earlier today, but are now trading below the previous settlement level. Iran and the wider Mideast Gulf region were on high alert as Israel weighed its options for a response to Tehran's assault on Israeli territory last weekend. That attack, involving more than 300 drones, ballistic missiles and cruise missiles, was the first ever direct assault on Israel from Iranian territory. As yet, there has been no official confirmation from either side that today's attack originated from Israel. Media reports quoted unnamed US and Israeli officials saying Israel had launched the drones, and Oman's foreign ministry condemned Israel "for its attack this morning on Isfahan". Iran's attack on Israel last weekend was itself in response to a suspected Israeli air strike on an Iranian diplomatic compound in the Syrian capital, Damascus, at the start of April. That killed seven members of Iran's powerful Islamic Revolutionary Guard Corps (IRGC), including two generals. Despite its magnitude, the Iranian retaliation was not only highly choreographed, but also telegraphed to key stakeholders beforehand in an effort to limit damage and casualties. Israel said immediately after the attack that almost all of Iran's drones and missiles were intercepted with the help of allied forces in the region and that there were no fatalities, only "light" damage to the Nevatim military base in Israel's Negev desert. De-escalatory strike The limited nature of Iran's strike prompted Israel's western allies to urge it to show restraint. The US appealed to Israeli prime minister Benjamin Netanyahu to "take the win" and claim victory for its defence. But as it became increasingly clear that a response without a military dimension would be unpalatable for Israel, the US and Europe turned their efforts to making sure whatever Israel chose to do was also limited and fell below a threshold that could trigger yet another escalation in tensions. "This was probably the level of attack that on one hand was necessitated by internal Israeli calculations within the security cabinet and broader political coalition, and by virtue of the pressure by allies and what the US was willing to countenance," said Geneva Graduate Institute senior research associate Farzan Sabet. "It was a limited strike with the message that we can hit you anywhere, anytime, and without having to resort to a major strike involving 300-plus missiles." In the days following Iran's attack on Israel, several key IRGC figures said Tehran had "decided to create a new equation with Israel" ꟷ specifically that Tehran would retaliate to any Israeli attack on its interests or citizens from Iranian territory. This would be a shift from the previous status quo, which would see Israel regularly target Iranian interest and officials in third countries, many times without response from Tehran. But the limited nature of Israel's latest attack, and the very concerted effort by Iranian officials, military personnel and media to downplay its severity and impact so far, suggests it could feasibly provide a de-escalatory off-ramp for Iran. "Should Israel's response be limited to this, the Islamic Republic will not be under pressure to retaliate," said Arab Gulf States Institute senior fellow Ali Alfoneh. But is too early to say whether today's incident is the totality of Israel's response. "We're running up to [the Jewish holiday of] Passover [on 22-30 April]. The Israelis may not have wanted to carry out a major retaliation ahead of Passover so as to avoid the threat of war hanging over the country during the holiday," Sabet said. "So it is very possible that more [retaliatory attacks] could come after Passover." By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Karoon cuts 2024 guidance on lower US output


19/04/24
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19/04/24

Karoon cuts 2024 guidance on lower US output

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Australia’s Woodside records weaker Jan-Mar LNG output


19/04/24
News
19/04/24

Australia’s Woodside records weaker Jan-Mar LNG output

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TUI Cruises receives methanol-ready ship


18/04/24
News
18/04/24

TUI Cruises receives methanol-ready ship

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Oil firm ReconAfrica agrees to class action settlement


18/04/24
News
18/04/24

Oil firm ReconAfrica agrees to class action settlement

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