Brazilian oil company Petrobras announced last Friday the sale phase of 4 refinery units and corresponding teasers, comprising 100% stake of the following assets – teasers with further information can be downloaded following the included links:

1. Abreu e Lima Refinery (“RNEST”), storage terminal and a set of short pipelines interconnecting the refinery, terminals and oil supply chain and products consumer market, in the Industrial Complex of Suape, State of Pernambuco, Brazilian northeast region (https://www.investidorpetrobras.com.br/enu/15071/Teaser%20RNEST_FINAL_ENG.pdf)
2. Landulpho Alves Refinery (“RLAM”), storage terminal and a set of short pipelines interconnecting the refinery, terminals and oil supply chain and products consumer market, State of Bahia, connected to Camaçari Petrochemical Complex (https://www.investidorpetrobras.com.br/enu/15070/Teaser%20RLAM_FINAL_ENG.pdf)
3. Presidente Getúlio Vargas Refinery (“REPAR”), storage terminal and a set of short pipelines interconnecting the refinery, terminals and oil supply chain and products consumer market, States of Paraná and Santa Catarina, Brazilian south region (https://www.investidorpetrobras.com.br/enu/15069/Teaser%20REPAR_FINAL_ENG.pdf)
4. Alberto Pasqualini Refinery (“REPAF”) , storage terminal and a set of short pipelines interconnecting the refinery, terminals and oil supply chain and products consumer market, State of Rio Grande do Sul, Brazilian utmost south State (https://www.investidorpetrobras.com.br/enu/15068/Teaser%20REFAP_FINAL_ENG.pdf)

 

Citibank was chosen as the financial advisor for the sale of the assets.

Procedure to participate in the acquisition of all 4 refineries is basically the same:

 

1. Notify Citibank by e-mail – project.downstream@citi.com – until August 16th, 2019 to receive the Confidentiality Agreement and Compliance Certificate;
2. Distribution of the Confidential Information Memorandum will start on July 15th, 2019 for the interested purchasers who have executed the Confidentiality Agreement and Compliance Certificate
3. Deadline for execution of the Confidentiality Agreement and Compliance Certificate will be September 27th.

 

Below, some highlights of the assets:

 

• 1 – RNEST highlights:

 

• 1 refinery where crude oil is processed and refined into petroleum products such as naphtha, diesel fuel and liquefied petroleum gas (LPG), capacity of 130,000 barrels per day (“bpd”) (API 25, to drop to 16-19 upon emission abatement unit – SNOX – starts to operate, NCI 8.5); RNEST 2nd processing train (additional refining set) brings the potential for further 130,000 bpd of capacity growth and the possibility for a low-cost and prompt response to serve upcoming market demand
• 101 km of pipelines
• 1 terminal– capable to store 4.3 barrels (“bbl”) of oil products & ethanol and 0.4 of bbl of LPG; crude oil is supplied directly to RLAM tank farms of 5.1 million bbl, with no external crude oil storage
• 5% of Brazil’s total oil refining capacity in 2018, with 1^st processing train, would raise up to 10% with 2^nd train;
• Possibility of gasoline production
• High automation level with Distributed Control System (DCS) and Safety Instrumented System (SIS)
• Energy self-sufficiency, thus providing opportunity to trade energy
• Well-positioned to export products Upon completion of RNEST 2nd processing train, RNEST will represent 10% of Brazil’s total oil refining capacity(2)

 

• 2 – RLAM highlights:

 

• 1 refinery where crude oil is processed and refined into petroleum products such as naphtha, gasoline, diesel fuel, asphalt
• base, jet fuel, low sulfur fuel oil, liquefied petroleum gas (LPG) and others, capacity of 333,000 bpd (API 30, NCI 7.0)
• 669 km of pipelines
• 4 terminals  – capable to store 4.3 bbl of oil products & ethanol and 0.4 of bbl of LPG; crude oil is supplied directly to RLAM tank farms of 4.1 million bbl, with no external crude oil storage
• Integrated system with direct access to full logistics infrastructure, vigorous consumption market and premium refining margins
• Exposure and direct access to the northeastern region, one of the largest and fastest-growing Brazilian regions
• 14% of Brazil’s total oil refining capacity in 2018

 

• 3 – REPAR highlights:

 

• 1 refinery where crude oil is processed and refined into petroleum products such as gasoline, diesel fuel, asphalt base, jet fuel, liquefied petroleum gas (LPG) and others, capacity of 208,000 bpd (API 27, NCI 7.7)
• 476 km of pipelines
• 5 terminals  – capable to store 2.9 million bbl of crude oil, 1.9 bbl of oil products & ethanol and 0.1 of bbl of LPG
• Integrated system with direct access to full logistics infrastructure, stable market growth and premium refining margins
• REPAR Cluster serves a matured market and allows for supplying the southeastern and center-western regions
• 9% of Brazil’s total oil refining capacity

 

• 4 – REFAP highlights:

 

• 1 refinery where crude oil is processed and refined into petroleum products such as gasoline, diesel fuel, asphalt base, jet fuel, liquefied petroleum gas (LPG) and others, capacity of 208,000 bpd (API 29, NCI 5.5)
• 260 km of pipelines
• 2 terminals – capable to store 3.2 million bbl of crude oil, 1.4 bbl oil products & ethanol
• Integrated system with direct access to full logistics infrastructure, stable market growth and premium refining margins
• REFAP Cluster serves a matured market and allows for supplying the southeastern and center-western regions
• Strategically positioned cluster to supply the Southern Cone region
• Refinery with electric energy generation surplus, thus offering energy trading opportunities
• 9% of Brazil’s total oil refining capacity

 

Our M&A team is at your disposal for assisting on the procedure.

Paulo Yamaguchi – pyamaguchi@tesslaw.com

Christiane Gregolin – cgregolin@tesslaw.com

Marco Mello Cunha – mcunha@tesslaw.com

Fabio Baum – fbaum@tesslaw.com