Brazil’s newly inaugurated government under President Luiz Inácio Lula da Silva has signalled its desire for the state-owned oil and gas major Petróleo Brasileiro SA (Petrobras) to play a broader role in the development of various public policies in the country, Brazil’s O Globo newspaper reported this past weekend.
The government sees the expansion of Petrobras’ role to include the resumption of fertilizer production and the expansion of refining supply in Brazil. However, the report pointed out these aspirations collide with a company that has reduced its range of activities as a result of a change in strategy in recent years marked by the sell-off of assets.
Last month, Petrobras halted the competitive procedure for the sale of its wholly-owned nitrogen fertilizer plant, Araucãria Nitrogenados, known as ANSA, in the southern Brazilian state of Paraná (GM Dec. 23, 2022).
The sale was in the binding phase, but the company provided no public comment for its decision. In its Dec.19 statement, Petrobras said it would now evaluate its next steps related to the divestment of ANSA.
But, according to a bnamericas report in the same week, citing a researcher at Brazilian petroleum research institute Ineep, Henrique Jäger, Petrobras’ decision to halt sales of key downstream assets – while moving forward with its upstream divestments – followed the election victory of Lula.
According to Jäger, the new president’s transition team for the energy sector considers it of strategic importance that the state-owned Petrobras remains an integrated upstream-and-downstream company with a major presence in the refining, natural gas, and petrochemical sectors, including fertilizers, while also investing in alternative energy sources.
As previously reported Jäger believes Petrobras will resume investments in the fertilizer sector, likely putting ANSA back into operation with the reconversion to natural gas. Previously, the plant has been operated from asphaltic rock, whose market value has appreciated, making the operation expensive, which led to the plant’s mothballing, he said.
Jäger also thinks Petrobras will probably finish the construction of its other nitrogen fertilizer unit, “Nitrogen Fertilizer Unit-III” (UFN-III), in Três Lagoas, in the state of Mato Grosso do Sul, “if only to recover the investments already made and sell it later,” according to the report.