In a securities filing, Brazilian state-controlled oil and gas giant Petrobras announced it was unilaterally terminating the contract to sell its Lubnor refinery, located in the northeastern state of Ceará, to Grepar Participações, a company belonging to asphalt producers from southern Brazil.
Petrobras cites “the lack of compliance” with some provisions in the contract, which should have been met by November 25, “despite the best efforts undertaken by Petrobras to conclude the transaction.”
Lubnor has a production capacity of 8,200 barrels per day, making it a national leader in asphalt production and the only plant in the country to produce naphthenic lubricants, most commonly used in electrical transformers and equipment that operate at low temperatures.
The deal, signed in 2022, was worth USD 34 million, including a USD 3.4 million down payment. Petrobras decided to sell Lubnor as part of a 2019 agreement with Cade, Brazil’s antitrust agency, in which the company committed to selling eight of its 13 refineries or face an investigation into alleged anticompetitive actions in the oil refining business, which is under a de facto Petrobras monopoly.
Land issues may have hindered the sale. Lubnor is located in Fortaleza, the state capital of Ceará, on land that is co-owned by the federal government and the Fortaleza City Hall. Uncertainty around whether Petrobras could sell the plant to a third party was raised by officials.
Between August and November, there were two attempts to...
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