Petróleo Brasileiro SA, Rio de Janeiro, said it has initiated the mothballing process of the nitrogen fertilizer plant at Camaçari, Sergipe (Fafen-SE) in northeast Brazil. It said it continues with the lease bidding process for this unit and for the nitrogen fertilizer plant at Laranjeiras, Bahia (Fafen-BA), also in northeast Brazil, awaiting proposals from potential interested parties.
Last month, the oil and gas group announced it had initiated the leasing process for both facilities (GM Jan. 11, p.25).
Petrobras since March last year has been discussing the mothballing of the two plants with authorities and representative bodies, so that the potential negative effects on the Bahia and Sergipe economies are minimized. It had said it opted for mothballing as there was “no manifestation of interest” by potential buyers for the two units.
In early November, it pushed back the planned mothballing to Jan. 31, 2019, and revealed that leasing of the facilities to third parties was an option under consideration (GM Nov. 2, 2018). Earlier last year, it had said it would idle the plants at the end of June, and then later, on Oct. 31, 2018 (GM July 20, 2018; March 30, 2018).
“Currently, more than 80 percent of Brazil’s urea market, the main product of the nitrogenous segment, is already served by imports,” Petrobras said. “With respect to the ammonia market, where Petrobras accounts for about 30 percent of the supply, the group is investing in logistics infrastructure in the port of Aratu, Bahia, to enable the customer services located in Polo de Camaçari and will continue to meet demand by selling its remaining inventories in the short term.”
The group said it has offered Fafen-SE employees opportunities for internal reallocation. A minimum staff will remain in operational routine with the objective of guaranteeing the integrity and security of the facilities.