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Petrobras (PBR) Finalizes RLAM Refinery Sale to Mubadala

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Petroleo Brasileiro S.A. or Petrobras (PBR - Free Report) recently entered into an agreement to sell its Landulpho Alves Refinery (RLAM) and its related logistics assets to Abu Dhabi’s Mubadala Capital for $1.65 billion, contingent on regulatory approvals.

For quite some time, Petrobras has been looking for a lucrative divestment bid for its RLAM in the Brazilian state of Bahia from prospective buyers. Notably, in June 2020, Mubadala Investment Company began exclusive talks with Petrobras authorities after submitting the best offer to purchase the company’s RLAM and getting the invitation to negotiate the deal. However, discussions were stalled due to some reasons. Then again last December, the state energy producer mulled over a buyout option from the Mubadala Group.

Meanwhile, management informed that this state-run energy giant’s sale process of Refinaria Presidente Getulio Vargas (REPAR) in Parana state was unsuccessful and it chose to halt the same. The deal fell through because the binding offers that Petrobras received for the refinerycomprised conditions that failed to meet its economic-financial evaluation. However, now the company plans to resume the divestiture of REPAR shortly.

Petrobras’ sale of eight refineries is currently on track and all the divestments are estimated to be completed by the first quarter of 2022.

Of the eight refineries with 1.15 million barrels per day (bpd) of installed capacity, binding proposals for Petrobras’ three refineries, namely REMAN in Amazonas, LUBNOR in Ceara and SIX in Parana states are still in progress.  

Last December, Petrobras received the binding offer for REFAP in the state of Rio Grande do Sul. Two other refineries, namely RNEST in Pernambuco state and REGAP in Minas Gerais with production capacities worth 130,000 bpd and 166,000 bpd each are slated to get binding offers in the first quarter of this year.

Company Profile

Petrobras is the largest integrated energy firm in Brazil and one of the biggest in Latin America. The company’s activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks. Its operations also include refining, processing, trading and transportation of oil and oil products, natural gas and other fluid hydrocarbons apart from other energy-related operations.

Zacks Rank & Key Picks

Petrobras currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the energy space include Matador Resources Company (MTDR - Free Report) , Diamondback Energy, Inc. (FANG - Free Report) and Devon Energy Corporation (DVN - Free Report) , each presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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