Petrobras to shut fertilizer plants in Jan 2019

Brazilian state-controlled oil company Petrobras set a hard stop of 31 January to mothball two money-losing fertilizer plants, following months of backtracking.

The company had originally said on 20 March that it would shut the two plants by 30 June, but local politicians leaned on Brasilia and the company to consider other options to keep the plants open.

Later in March, Petrobras said it would keep them on line until 31 October and formed a task force with local government and industry representatives to analyze alternatives.

Today, Petobras said it plans to shut the Fafen-SE plant in Sergipe and the Fafen-BA plant in Bahia on 31 January, unless the task force comes up with a viable solution that at least offers a minimal return for the company. Petrobras said the additional time was needed to conclude an analysis of the future of the plants.

Together the plants have the capacity to produce 900,000 t/yr of ammonia, 1.1mn t/yr of urea, 36,000 t/yr of nitric acid and 150,000 t/yr of CO2.

The shutdown of the plants is part of a larger corporate restructuring of the company, which includes spinning off the fertilizer business to focus on oil exploration and production.

In May, Petrobras entered exclusive negotiations with Russian fertilizer giant Acron for two fertilizer assets in Parana and Mato Grosso do Sul state, but the negotiations have not yet been finalized.