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Brazil: The President of Petrobras announces partnership to resume operation of privatized areas of the company

Ignacio Teson•Wednesday, February 14, 2024•2 min read

Brazil: The President of Petrobras announces partnership to resume operation of privatized areas of the company

While on a trip to the Middle East, Petrobras President Jean Paul Prates stated on Wednesday that he is building a partnership with the Arab fund Mubadala Investment Company for the Brazilian state-owned company to resume operations at RLAM (Landulpho Alves Refinery) in Mataripe, Bahia.

Petrobras is the largest state-owned company in Brazil.

The refinery was privatized and sold to the Arabs during Jair Bolsonaro’s administration (PL) in November 2021, as part of Petrobras’ divestment policy initiated by the previous government. However, since taking office, Luiz Inácio Lula da Silva’s (PT) team has been trying to block this initiative.

Despite not having a direct impact on Petrobras’ stock price, this decision sets a clear direction: increasing the state’s capital to make decisions in the energy sector. The privatization of Petrobras and Eletrobras has been one of the hottest topics of discussion in Brazil in recent years.

However, the President of Petrobras did not provide further details about the deal. “Further details and current progress will be kept confidential until the process is finalized,” he declared.

Last month, Petrobras launched an administrative investigation to assess the sale of the Mataripe refinery. The investigation was in response to the disclosure of a report, which stated that the sale of the refinery was made in a transaction at a low price.

In addition to Abu Dhabi, Prates also visited India last week, where he participated in the India Energy Week, and Kuwait, where he met with the CEO of KUFPEC (Kuwait Foreign Petroleum Exploration Co.), which will open a subsidiary in Brazil in partnership with Petrobras.

In a post on X, Prates stated that he met in Abu Dhabi, the capital of the United Arab Emirates, with the chairman of Mubadala Capital’s board, Waleed Al Mokarrab Al Muhairi, whose management and technical team have been working for months to build a partnership aimed at restoring operations at the Mataripe refinery.

“We agreed that our teams will intensify work shortly after the end of the Carnival holidays to finalize the new corporate and operational configuration still in the first half of 2024,” Prates said in the post.”

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ABOUT THE AUTHOR See More
Ignacio Teson
Economist and Financial Analyst
Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.
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