Petrobras nearing sale of US refinery to Chevron

The board of Brazil's state-controlled Petrobras will vote today on whether to pursue an agreement with Chevron to sell its 100,000 b/d Pasadena refinery in Texas.

Negotiations with Chevron are in a final phase, but no agreement has been signed, Petrobras said today in a securities filing. The value of the proposed transaction was not disclosed.

Chevron declined to comment yesterday.

In February 2018, Petrobras launched the sale of Pasadena along with associated crude and products storage of 5.1mn bl and maritime terminal, logistics and inventory. An adjacent 143 acres that is also part of the Pasadena package could be used to build additional processing units, terminalling or storage capacity, Petrobras said.

The refinery is located on the Houston Ship Channel and has direct access to the Colonial and Explorer pipeline systems.

Pasadena is Petrobras' last overseas refinery and has long been a divestment target. The company has already sold its stakes in refineries in Japan and Argentina. Petrobras is also in the process of selling controlling stakes in some of its Brazilian refineries.

A Pasadena agreement would mark the first downstream sale under the company's $27bn divestment plan for 2019-23.

Pasadena was one of the downstream projects at the center of Brazil's far-reaching Lava Jato corruption investigation.

In 2006, Petrobras acquired a 50pc stake in the refinery from Belgium's Transcor Astra through its subsidiary Petrobras America. The partnership dissolved in 2008, leading to a legal battle that resulted in a 2012 US federal court-order forcing Petrobras to acquire Transcor Astra's remaining 50pc interest.

Petrobras spent around $1bn on the refinery that Astra had initially acquired for around $360mm.

Brazil's federal audit court TCU is still investigating Brazil's impeached former president Dilma Rousseff, Petrobras' board chair at the time of acquisition, and other Petrobras executives over the deal the court says cost public coffers around $580mn.