Page 4 - LatAmOil Week 34 2022

LatAmOil COMMENTARY LatAmOil

REFAP produces very little S10 diesel (Photo: Petrobras)
Another disruption in

Brazil’s refinery sales?

Industry observers say upcoming changes in diesel emissions standards have the

potential to force changes in refinery valuations, future investment commitments

JUST a few weeks ago, Brazil’s national oil com- are displaying more interest now than they did
pany (NOC) Petrobras was waxing optimistic last year because of the fuel market disruptions
WHAT: about its second attempt to sell three refineries, triggered by the Russian invasion of Ukraine.
ANP is reportedly gearing saying that foreign investors were showing more That event has caused crude oil prices to shoot
up to propose a schedule interest in the plants than they had the first time upward, and petroleum product prices have
for introducing new sul- around. Rodrigo Araujo, the company’s CFO climbed also, making fuel sales more profitable.
phur content standards and investor relations officer, told Argus Media
for diesel. in late July that Petrobras had already received Disruption in emissions standards
several expressions of interest (EoIs) in the refin- However, another potential source of disrup-
WHY: eries since putting them back on the market in tion has emerged, and some industry observers
Some of Petrobras’ June. believe it may undermine Petrobras’ hopes for
refineries cannot produce He was referring to Abreu e Lima Refinery the refinery privatisation sales. It is not directly
large amounts of S10
diesel. (RNEST), a 130,000 barrel per day (bpd) plant related to the sell-offs but stems from changes
in Pernambuco State; Alberto Pasqualini Refin- in emissions standards for diesel fuel, which is
WHAT NEXT: ery (REFAP), a 201,000 bpd plant in Rio Grande vital for the trucking, transport and agricultural
The change in emissions do Sul; and Presidente Getúlio Vargas Refinery sectors.
standards could disrupt (REPAR), a 220,000 bpd plant in Paraná. Petro- Sources familiar with the issue explained
the timetable for the bras had tried to sell all three refineries last year to Reuters last week that the Brazilian govern-
NOC’s second attempt to but suspended the process after failing to receive ment’s plans for introducing new standards for
sell certain plants. enough binding offers. diesel could affect the valuation of some of the
According to Araujo, potential investors oil-processing plants slated for sale.

P4 www. NEWSBASE .com Week 34 24•August•2022