Brazil-based multinational petroleum company Petróleo Brasileiro SA (Petrobras), Rio de Janeiro, said on Sept. 11 that it has initiated the disclosure phase to divest 100 percent of its assets in Araucária Nitrogenados SA (ANSA) and in the Nitrogen Fertilizer Unit III (UFN-III).
ANSA is a wholly-owned subsidiary of Petrobras, with a nitrogen fertilizer unit in operation. The facility is located in the State of Paraná, near main consumer markets and the Presidente Getulio Vargas refinery (Repar), and has a production capacity of 1,975 mt/d of urea, 1,303 mt/d of ammonia, and 450 m3/d of ARLA 32, an automotive liquid reducing agent. The facility also produces 200 mt/d of carbon dioxide, 75 mt/d of carbon pellets, and 6 mt/d of sulfur.
UFN-III, under construction since 2011, is located in the State of Mato Grosso do Sul, near main consumer markets and the Gasbol gas pipeline. The nitrogen complex is 81 percent complete. The plant’s production capacity will include 3,600 mt/d of urea, 2,200 mt/d of ammonia, and 290 mt/d of carbon dioxide. The ammonia technology is KBR and urea is Stamicarbon. Completion of UFN-III will be the responsibility of the buyer.
Petrobras reportedly sought to sell UFN-III to a Sinopec-led consortium of Chinese companies in March (GM March 17, p. 17). A year earlier, Petrobras was reportedly seeking a partner to assist in the resumption of construction, according to Bloomberg.
Potential investors in the two properties are expected to sign a confidentiality agreement by Sept. 29, 2017. Investors must be in a consortium formed with producing companies in the nitrogen fertilizer sector and hold at least US$1 billion in assets under management.
Petrobras said there are strong fundamentals in the Brazilian fertilizer sector, driven by growth in agribusiness. It noted that Brazil still presents a production deficit in fertilizers, with 24 million out of 34 million mt of NPK consumption imported in 2016. It said the urea production capacity of the two offered units would represent about 40 percent of Brazil’s 2016 consumption.
Petrobras said it will not be offering a long-term natural gas supply contract with the assets, with gas supply the sole responsibility of the potential investor. ANSA uses 430,000 m3/d of natural gas, while UFN-III will use 2.2 million m3/d. Other ANSA inputs include 1,000 mt/d of asphalt residue (RASF), 50 mt/d of fuel oil, and 60 mt/h of steam.
Banco Bradesco BBI SA has been retained as the company’s exclusive financial advisor on the transaction. More information is available at http://www.investidorpetrobras.com.br/en/press-releases.
In other news, Petrobras on Sept. 8 extended a deadline for the signing of confidentiality agreements to Sept. 29 for the full sale of its exploration, development, and production rights in seven sets of shallow-water fields (total of 30 concessions) located in the states of Ceara, Rio Grande do Norte, Segipe, Rio de Janeiro, and Sao Paulo. Petrobras said the extension is due to market’s interest in the process.
Also on Sept. 8, the company signed a Memorandum of Understanding with Shell Exploration Co. (West) BV, a Royal Dutch Shell subsidiary, to establish mutual long-term collaboration with an operational focus, in assets which are already operated in partnership between the two companies. Petrobras and Shell are currently partners in ten exploration and production consortia, each one operating in five blocks.