Exclusive: Brazil's Petrobras refineries sale lures trading cos, PetroChina, Saudi Aramco - sources

By Tatiana Bautzer and Rodrigo Viga Gaier SAO PAULO/RIO DE JANEIRO (Reuters) - Brazil's planned privatisation of eight Petroleo Brasileiro SA refineries has lured several of the world's largest trading and oil companies as prospective bidders, two sources with knowledge of the matter said. Around 20 companies have signed non-disclosure agreements granting them access to the refineries' data and signalling that they are considering a bid, the sources added, speaking on condition of anonymity to disclose private details of the sale.

Reuters August 27, 2019 07:07:19 IST
Exclusive: Brazil's Petrobras refineries sale lures trading cos, PetroChina, Saudi Aramco - sources

Exclusive Brazils Petrobras refineries sale lures trading cos PetroChina Saudi Aramco  sources

By Tatiana Bautzer and Rodrigo Viga Gaier

SAO PAULO/RIO DE JANEIRO (Reuters) - Brazil's planned privatisation of eight Petroleo Brasileiro SA refineries has lured several of the world's largest trading and oil companies as prospective bidders, two sources with knowledge of the matter said.

Around 20 companies have signed non-disclosure agreements granting them access to the refineries' data and signalling that they are considering a bid, the sources added, speaking on condition of anonymity to disclose private details of the sale.

The first round of non-binding offers for four of the eight refineries Petrobras put on the block is due on Oct. 11, the sources said. The eight refineries have total capacity of 1.1 million barrels per day.

Among the potential bidders are trading firms Vitol SA [VITOLV.UL], Glencore PLC and Trafigura AG [TRAFGF.UL]. Local companies Ultrapar Participações SA and Raizen, a joint venture of Brazil's Cosan SA and Royal Dutch Shell , also signed non-disclosure agreements.

Other companies interested, according to the sources, include PetroChina Co <601857.SS> and Sinopec <600688.SS>, which already has a Brazilian joint venture with Spain's Repsol . Oil behemoth Saudi Aramco, which is planning one of the world's largest initial public offerings, is also looking at the refining units' numbers.

The request to access the data room is just the first step of companies interested in the deal, and does not mean they will deliver bids on Oct. 11.

Petrobras, PetroChina, Ultrapar, Sinopec and Vitol did not immediately comment on the matter. Raizen, Trafigura, Saudi Aramco and Glencore declined to comment.

TRANSFORMATIVE DEALS

The deal, to be one of Petrobras' largest divestitures ever, would transform Brazil's oil industry and may raise around $18 billion, bankers working on the deal say. Refining has traditionally been state-owned in Brazil, triggering occasional calls for government price controls.

At least partial privatisation is widely seen as one of the best possible ways to bring real competition to the Brazilian oil industry.

Antitrust watchdog CADE has already forced Petrobras to change its refinery sale process to boost competition, demanding the separate sale of each of the eight refineries. A single buyer will be barred from buying two of the largest refineries in the same area, whether it be the northeast, the south or the southeast.

Petrobras is also carving out logistics assets, such as oil pipelines and terminals, to sell along with the refineries, one of the sources said.

Most of the bidding groups are expected to include private pipeline operators, possibly including France's Engie and Canada's Brookfield , one of the sources said, explaining that oil companies are reaching out to them. Both companies recently acquired Petrobras assets.

(Reporting by Tatiana Bautzer in Sao Paulo and Rodrigo Viga Gaier in Rio de Janeiro; Editing by Christian Plumb and Leslie Adler)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.