Petrobras Is in Talks With Mubadala for Stake in Bahia Refinery - Yahoo Finance

Petrobras Is in Talks With Mubadala for Stake in Bahia Refinery

(Bloomberg) -- Brazil’s state oil company Petrobras said it’s in talks with Mubadala Capital to buy back a stake in a refinery it sold two years ago to the investment arm of Abu Dhabi’s sovereign wealth fund.

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The deal is still subject to internal evaluation by Petrobras, and a partnership is also under consideration, the company said in a statement Friday. The move is part of a potential strategic downstream partnership in Brazil between the firms, which in September signed a memorandum of understanding to develop such projects.

The Mataripe refinery, in Brazil’s northeastern state of Bahia, has a processing capacity of 333,000 barrels of oil a day and is currently operated by Acelen, an energy company owned by Mubadala. The company paid $1.8 billion to buy the asset during Brazil’s previous administration.

“We see this as an excellent opportunity to expand value creation throughout the energy industry supply chain, both in Brazil and abroad,” Oscar Fahlgren, head of Mubadala Capital in Brazil, said in a statement, confirming the discussions.

President Luiz Inacio Lula da Silva pledged during his electoral campaign to prioritize refining. And Petrobras Chief Executive Officer Jean Paul Prates has vowed to halt “irrational” divestments, and instead has started shifting the oil company’s focus to acquisitions. Alexandre Silveira, the country’s Mines and Energy Minister, has also called for Petrobras to repurchase the plant, as part of a policy to shield consumers in the country’s northeast from high fuel prices.

Read More: Abu Dhabi’s Mubadala Plans to Invest $1 Billion a Year in Brazil

(Updates with Mubadala comments in fourth paragraph)

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