Petrobras to receive binding bids for Bahia refinery

Brazil's state-controlled Petrobras will receive binding offers today for its 333,000 b/d Landulpho Alves refinery (Rlam) in Bahia state, a sign the company is moving forward with its ambitious downstream divestment plan after suspending the process in March.

Petrobras' $20bn-$30bn asset sales target is anchored on eight refineries with around 1.1mn b/d of installed capacity.

In addition to the refinery, originally built in 1950, the Rlam transaction also covers around 670km (416mi) of pipeline and storage terminals with 4.7mn bl of capacity for crude, LPG and fuel.

China's state-owned Sinopec and Abu Dhabi's state-owned investment fund Mubadala are among the parties interested in the refinery, industry participants familiar the process say.

"This transaction will reshape the oil products landscape in Brazil," Petrobras has said about the Rlam sale.

With a Nelson Complexity Index (NCI) of 7.0, Rlam is one the most efficient of the refineries that Petrobras is seeking to sell.

The plant yielded around 254,400 b/d of products in the first four months of 2020, an almost 31pc increase over the same period of 2020, according to data from oil regulator ANP.

Around 37pc of the refinery's yield is diesel, but the unit recently boosted production of low-sulfur marine fuel for export. The refinery produced around 102,000 b/d of fuel oil through April 2020, a 90pc year-on-year increase.

It is not clear if the sales processes for the seven other refineries have also resumed after Petrobras postponed binding offers in March, just as the Covid-19 pandemic was setting in and oil prices crashed.

Obligated by Brazil's anti-trust watchdog Cade to dispose of refinery stakes by the end of 2021, Petrobras has said that some refinery deals could be signed by year-end and closed in 2021.

By Nathan Walters