Brazil refinery plans from Lula camp would face big obstacles -sources (updated)
08/09/2022 18:31
(Adds Atem declining to comment)
By Tatiana Bautzer
SAO PAULO, Sept 8 (Reuters) - Opposition proposals to roll
back the initial privatizations of Brazilian refineries would
run into stiff resistance from their new owners, with sale
contracts offering no room for reversal, three people with
knowledge of the matter told Reuters.
Advisors to leading presidential candidate Luiz Inacio Lula
da Silva have floated the idea of buying back refineries or
appointing directors at the privatized units. urn:newsml:reuters.com:*:nL1N2ZH1RI
Lula's campaign has not yet contacted the new owners of
refineries sold by state oil company Petroleo Brasileiro SA
PETR4.SA (Petrobras), according to the three sources, who
requested anonymity due to the sensitivity of the matter.
Mubadala Investment Company, which bought RLAM, the largest
refinery sold so far, is currently investing to increase
capacity usage and is not interested in selling, one of them
said. The United Arab Emirates state investor paid $1.8 billion
for RLAM, the refinery in the northeastern state of Bahia.
RLAM was using around 70% of its capacity when Mubadala
bought it, and renovation currently underway aims to increase
capacity utilization closer to 100%, sources added.
Although Mubadala would not refuse talks if Petrobras tries
to buy back the refinery, chances of agreeing to sell it are
small, according to the sources.
Mubadala and Petrobras did not immediately comment on the
matter. The campaign of former president Lula said the country
needs to reduce dependence on fuel imports and a "new strategy
to expand local refining capacity, including refineries upgrades
and conclusion of stalled works." The campaign added investments
in new refineries may be considered, but not on the short term,
and that a new government plans to build a new policy for
Petrobras.
Petrobras sold other three smaller refineries. Six, a shale
refinery in the southern state of Parana, was bought for $33
million by Canada's F&M Resources. Lubnor, in the northeastern
state of Ceara, was bought for $34 million. Last year, the
refinery Reman, in the northern state of Amazon, was sold for
$189.5 million to local group Atem. Atem declined to comment.
The other acquirers did not immediately comment.
The sale contracts of the refineries also provide no margin
for the government to appoint board members or otherwise
influence management, the people added.
Previous governments led by Lula's Workers Party have
adopted unorthodox economic policies, but have not breached
contracts or threatened foreign investment in the country.
(Reporting by Tatiana Bautzer
Editing by Brad Haynes, Diane Craft and David Gregorio)
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