<article><p class="lead">Brazil's state-controlled Petrobras will launch a tie-breaking auction for its 208,000 b/d Presidente Getulio Vargas refinery (Repar) in Araucaria after a first binding round drew two comparable offers from China's state-owned Sinopec and domestic fuel distributors Raizen and Ultrapar.</p><p>It was not immediately clear which two of the three parties presented a joint bid. Raizen, a joint venture between Brazil's Cosan and Shell, and Ultrapar have expressed interest in various downstream assets that Petrobras is obliged to sell by anti-trust watchdog Cade. Sinopec has been considering multiple refining projects in Brazil for years, an offshoot of China's <a href="https://www2.argusmedia.com/en/news/2139178-brazilian-crude-exports-retreat-in-august?backToResults=true">thirst for Brazilian oil</a>.</p><p>The Repar sale package includes around 476km (295mi) of pipeline and five terminals with 4.9mn bl of crude, LPG and fuel storage capacity. </p><p>Located in the southern state of Parana, Repar is the second of nine refineries that Petrobras plans to sell as part of its $20bn-$30bn divestment campaign, a target that is likely to be expanded under the company's forthcoming 2021-25 business plan. </p><p>Petrobras is already in exclusive <a href="https://direct.argusmedia.com/newsandanalysis/article/2122105?keywords=rlam">negotiations</a> with Abu Dhabi's state-owned investment fund Mubadala for the sale of its 333,000 b/d Landulpho Alves refinery (Rlam) in Mataripe, a landmark deal that could be signed in early October.</p><p>Downstream assets make up the lion's share of divestment proceeds that Petrobras plans to raise in the medium term. Values have remained resilient in the face of lower oil prices, Petrobras executives say. </p><h3>Court challenge</h3><p>This week could be decisive for Petrobras' refinery divestment plan, with the federal supreme court scheduled to vote on a challenge from opposition lawmakers. </p><p>In July, lawmakers backed by oil labor unions petitioned the court to halt the refinery sales, which they say violate a 2019 supreme court decision that cleared Petrobras to sell controlling stakes in assets. The opposition argues that the refineries should not be treated as subsidiaries but as an integral part of Petrobras, an interpretation that would require congressional approval for the sales. </p><p>Voting virtually, three of the court's 11 justices have already voted in favor of some form of congressional oversight. </p><p class="bylines">By Nathan Walters</p></article>
