Petrobras Completes Sale of the Landulpho Alves Refinery to Mubadala Capital

Source: 11/30/2021, Location: South America

Petrobras finalized the sale of the Landulpho Alves Refinery (RLAM), located in Sao Francisco do Conde, Bahia, and its associated logistical assets to Mubadala Capital. After compliance with all the conditions precedent, the transaction was concluded with the payment of US$ 1.8 billion (R$ 10.1 billion*) to Petrobras, an amount that reflects the purchase price of US$ 1.65 billion , preliminary adjusted due to monetary restatement and changes in working capital, net debt and investments until the closing of the transaction. The contract also provides for a final adjustment to the purchase price, which is expected to be determined in the coming months. The refinery is the first among eight being sold by Petrobras to have the process completed. Acelen, a company created by Mubadala Capital for the operation.

According to the president of Petrobras, Joaquim Silva e Luna, the conclusion of the sale reflects the importance of portfolio management and strengthens the company's strategy: “This sale operation is an important milestone for Petrobras and the fuel sector in the country . We believe that, with new companies operating in refining, the market will be more competitive and we will have more investments, which tends to strengthen the economy and generate benefits for society. It is also part of the commitment signed by Petrobras with CADE to open up the refining market. From the company's point of view, it is a step forward in its resource reallocation strategy. In the refining segment, Petrobras will focus on five refineries in the Southeast, with investment plans that will position it among the best refiners in the world in terms of efficiency and operational performance.”

The president of Mubadala Capital in Brazil, Oscar Fahlgren, said: “Our priority is to guarantee excellence in the production and operation of the refinery, in addition to a structured, smooth and seamless transition. It is about creating value with special attention to people and the environment. We always emphasize the long-term commitment we have with the country and regions where we operate. This is certainly one of Acelen's goals.”

In addition to RLAM, two other refineries have already had their sales contracts signed: the Isaac Sabbá Refinery (REMAN), in Amazonas, which was signed on 8/25, and the Shale Industrialization Unit (SIX), in Paraná, with a contract signed on 11/11. When the processes of divestment of these two units are also concluded, Petrobras will be responsible for around 50% of the supply to the fuel market in the country. In addition to Petrobras and the new operators of these refineries, the market is also supplied by biofuel importers and producers.

As part of the refinery's repositioning strategy, Petrobras reinforces its commitment to sell the REGAP, LUBNOR, REPAR, REFAP and RNEST refineries and is investing in technologies to make the refineries that will remain in the company doubly resilient, both from an environmental and an economic point of view . The company will continue as the largest refiner in the country, focusing on refineries in SP and RJ that are closer to oil production and the largest consumer centers, with 50% of the country's refining capacity. The projection is to double, in 5 years, the offer of S-10 diesel in these refineries, a product with lower emission levels and at increasingly competitive costs.

The RLAM sale process was launched in June 2019 and in February 2021 the binding proposal was received. The entire process strictly followed the Divestment System. The sale of RLAM is in line with Resolution No. 9/2019 of the National Energy Policy Council, which established guidelines for the promotion of free competition in the country's refining activity, and is part of the commitment signed by Petrobras with CADE for opening of the refining sector in Brazil.

Next steps

With the conclusion of the sale, a transition phase begins, in which Petrobras teams will support Acelen in the operations of the Mataripe Refinery. This will happen under a service provision agreement, avoiding any operational interruption. Petrobras and Mubadala Capital reaffirm their strict commitment to operational safety at the refinery in all phases of the operation.

As already informed in the previous phases of the sale process, no Petrobras employee will be dismissed due to the transfer of control of RLAM to the new owner. Petrobras employees may choose to transfer to other areas of the company or join the Voluntary Termination Program, with a benefits package.

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