Petrobras and CADE execute settlement agreement on divestment of refineries

On Tuesday, June 11, 2019, the Administrative Council for Economic Defense (“CADE”) entered into a Settlement Agreement with Petrobras regarding the divestment of refining assets held by the state-owned company.
As reported by Petrobras, such Agreement involves the sale of 8 in a total of 13 refineries it currently owns. The assets have already been announced within Petrobras’s Press Release:

1. Abreu e Lima Refinery (“RNEST”)
2. Landulpho Alves Refinery (“RLAM”);
3. Gabriel Passos Refinery (“REGAP”);
4. Refinery Presidente Getúlio Vargas (“REPAR”);
5. Alberto Pasqualini Refinery (“REFAP”);
6. Isaac Sabbá Refinery (“REMAN”);
7. Northeastern Lubricants and Petroleum Derivatives (“LUBNOR”); and
8. Shale Industrialization Unit (“SIX”).

The Settlement Agreement also restricts the acquisition of several refineries by the same buyer or economic group, in the same region, as there may be potential competition between them, being:

1. RLAM and RNEST;
2. REPAR and REFAP; and
3. REGAP and RLAM.

Petrobras must conclude the divestment project by December 31, 2021. The company is expected to release teasers regarding the procedures of these divestments.

In addition to this project, there are several ongoing measures to promote greater competitiveness in the Brazilian fuel market, especially the end of the restriction on to the verticalization between distributors and resellers. In this respect, the National Council for Energy Policy  (CNPE) issued Resolution No. 12/2019 which sets deadlines to the National Oil and Gas Agency (ANP), the Ministry of Mines and Energy (MME) and other Federal Executive bodies to complete studies aimed at updating the regulatory framework of the Brazilian fuel supply sector.

Our Oil & Gas and Competition teams are available for any further information on this matter.