Brazilian Lula advised buying Petrobras refineries, study author says

A logo of Brazilian state-run oil company Petrobras is seen at its headquarters in Rio de Janeiro, Brazil October 16, 2019. REUTERS/Sergio Moraes

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Aug 5 (Reuters) – A study of the oil and gas industry commissioned by former President Luiz Inacio Lula da Silva’s campaign for the October elections will recommend boosting Petrobras’ refining capacity, including reversing privatizations refineries, said one of the study’s authors. Reuters.

The study also proposes new investments and the resumption of refinery projects abandoned by Petrobras after the state oil company decided to focus on production from its offshore pre-salt fields as it recovers from the largest investigation. of corruption ever undertaken in Brazil, the so-called Car Wash. scandal.

Among the proposals is the possibility of Petrobras taking over ownership of the RLAM refinery in Bahia, said study co-author William Nozaki, a member of the Workers’ Party team advising Lula on Petrobras affairs. . RLAM, the largest refining asset sold in 2021 by the company, is now owned by Acelen of Abu Dhabi’s Mubadala Group.

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“For some assets, it is possible to consult with the partners who acquired them to find out if they are really interested in remaining fully in the operation,” said Nozaki, coordinator at the Institute for Strategic Petroleum Studies, natural gas and biofuels (Ineep) linked to the oil workers’ union FUP.

“This is the case of RLAM.”

The Bahia refinery was the first to be divested by Petrobras of the group of eight refineries that will have to be sold by the company as part of the agreement signed with antitrust regulator CADE in 2019 to end its monopoly on Brazilian refining.

Nozaki did not comment on the antitrust implications of renationalizing the refineries. He said conversations should be started with the Mubadala fund to find out what their prospects are and if they really want to continue operating 100% of the refinery.

Lula is leading in the polls against incumbent President Jair Bolsonaro. His government program is not yet finished.

“The advice given by Lula is that nothing will be done in a traumatic way for shareholders or for Petrobras’ investments,” Nozaki said.

The study will propose to reassess the sale of three refineries included in the CADE agreement that are still in the process of being sold – Repar, in Parana, Refap, in Rio Grande do Sul, and Rnest, in Pernambuco.

Besides the Bahia refinery, Petrobras has already reached agreements to sell units to Amazonas (Reman), Parana (SIX), Ceará (Lubnor) and Minas Gerais (Regap).

Lula’s program echoes the plans of other Latin American left-wing leaders, such as Mexican President Andres Manuel Lopez Obrador, who has made building refining capacity to make the country energy self-sufficient a key pillar of his plan. presidency.

Nozaki admitted that reversing Petrobras’ refinery sales is “difficult”, but not impossible.

The main goal of boosting Petrobras’ refining capacity is to help Brazil deal with high inflation, he said.

“Lula asked us to put all available options on the table, from a technical point of view, and to think about how to deal with the problem of fuel inflation,” Nozaki said.

Inflation has topped 11% in the past 12 months, driven by fuel prices, which Bolsonaro has tried to mitigate with tax cuts as he seeks re-election.

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Reporting by Rafaella Barros; Written by Anthony Boadle; Editing by Jan Harvey

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