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Petrobras (PBR) Looks Out for Final Offers for RLAM Refinery

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Petroleo Brasileiro S.A. or Petrobras (PBR - Free Report) is looking for a lucrative divestment bid for its Landulpho Alves Refinery (RLAM) in the Brazilian state of Bahia from prospective buyers. To this end, management confirmed in the latter half of last Thursday that the state energy producer is mulling over an option from the Mubadala Group.

Notably, in June 2020, Mubadala Investment Company began exclusive talks with Petrobras authorities after submitting the best offer to purchase the company’s RLAM and was invited to negotiate the deal.

However, discussions ended and per Petrobras' Divestment Methodology, the process is presently assuming a new round of binding propositions. The new round requires the participants (including the Mubadala Group) — who put forth their binding offers — to give their final proposals by taking into consideration the contract’s negotiated versions with Mubadala. Petrobras anticipates receiving the final offers next month.

Petrobras is currently on its way to sell eight refineries and all the sales are estimated to be completed by the first quarter of 2022.

Of the eight refineries with 1.15 million barrels per day (bpd) of installed capacity, Petrobras secured binding proposals for three refineries, namely REMAN in Amazonas, LUBNOR in Ceara and SIX in Parana states.  

On Dec 10, Petrobras will receive binding offers for REFAP in the state of Rio Grande do Sul and REPAR in Parana. Two other refineries, namely RNEST in Pernambuco state and REGAP in Minas Geraiswith production capacities worth 130,000 bpd and 166,000 bpd each are slated to get binding offers in the first quarter of next year.

Company Profile

Petrobras is the largest integrated energy firm in Brazil and one of the biggest in Latin America. The company’s activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks. The operations also include refining, processing, trading and transportation of oil and oil products, natural gas and other fluid hydrocarbons apart from other energy-related operations.

Zacks Rank & Key Picks

Petrobras currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are CNOOC Limited (CEO - Free Report) , Noble Corporation (NE - Free Report) and Antero Midstream Corporation (AM - Free Report) , each presently holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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