Chevron to buy US refinery from Petrobras for $350mn

Chevron agreed today to acquire the 100,000 b/d Pasadena refinery from Brazil's state-controlled Petrobras for $350mn plus working capital of $212mn.

According to a Share Purchase Agreement signed today with Petrobras America, Chevron will acquire all the outstanding shares and equity interests of Pasadena Refining System, which includes the Texas refinery with 110,000 b/d of nameplate capacity and associated trading arm PRSI.

The final price is subject to readjustment, Petrobras said.

The deal is expected to close by June 2019.

"This expansion of our Gulf Coast refining system enables Chevron to process more domestic light crude, supply a portion of our retail market in Texas and Louisiana with Chevron-produced products, and realize synergies through coordination with our refinery in Pascagoula," said Pierre Breber, Executive Vice President of Chevron Downstream and Chemicals.

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.