Brazil's Petrobras to exit biofuels production
(Reuters) Brazil's state-controlled oil company Petróleo Brasileiro SA said Tuesday it will exit the biofuels sector, as the heavily indebted company seeks to prioritize investment in crude oil and gas production.
Petrobras, as the company is known, said biofuels would be one sector it plans to unload as part of sweeping asset sales plan. The company reaffirmed a $15.1 B in asset sales for the 2015-2016 period and fetch an additional $19.5 B through divestments and partnerships between 2017 and 2018.
Petrobras has a significant portfolio in biofuels. No specifics were provided on what years the sales were planned for.
Its largest asset is a 45.9% stake in Guarani Tereos Açúcar e Energia Brasil, which owns seven mills with a combined production capacity of 1.7 MMt of sugar and 900 MM liters (237.8 MM gallons) of ethanol per year.
Petrobras also owns 49% of Boa Vista mill in Goias state, a joint venture with Brazilian sugar and ethanol company Sao Martinho, and a 40% stake in the Bambui mill in the Sao Paulo state.
Petrobras also fully owns three biodiesel plants in Minas Gerais, Bahia and Ceara states and has a 50% stake in local biodiesel producer BSBIOS, which manages two large plants in the states of Parana and Rio Grande do Sul.
Sugar and ethanol prices have recovered strongly since Petrobras since the media began reporting the company planned to leave the biofuels sector early last year. Raw sugar prices hit the highest level since 2012 on Monday in New York, lifted by expectations of at least two years of a global supply deficit.
Reporting by Marcelo Teixeira; Editing by W. Simon
Comments