Petrobras fails in the sale of the fertilizer factory (with works stopped since 2014) to the Russian group Acron and multinational Unigel enters the UFN3 bidding dispute

Flavia Marinho
04-05-2022 15:00:28
in Refinery and Thermoelectric, uncategorized
Petrobras - Russia - fertilizers - business - plans - price UFNG3 Petrobras -Image: source Jornal MidiaMax UOL

The UFN3 operation, which had a capacity designed by Petrobras at 3,600 tons/day of urea and 2,200 tons/day of ammonia, can help Brazil reduce dependence on imported products, while the country deals with difficulties arising from the war between Ukraine and Russia.

Petrobras disclosed in a material fact to the Market on April 28, that the process of selling the Nitrogen Fertilizers Unit III (UFN-III), in the municipality of Três Lagoas, with the Russian group Acron, “given that the business plan proposed by the potential buyer, replacing the original project, made certain governmental approvals that were necessary for the continuity of the transaction impossible”.

According to a statement made by the oil company, “the company is carrying out the internal procedures to close the current sale process and preparing to launch a new teaser as soon as possible. The forecast is to launch the new process in early June. Petrobras reinforces its commitment to the broad transparency of its divestment projects and the management of its portfolio and informs that the subsequent stages of the project will be disclosed in accordance with the company's Divestment System”.

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After Petrobras released the note, secretary Jaime Verruck, from Semagro (Secretariat of Environment, Economic Development, Production and Family Agriculture of MS) clarified that In the last three months, the MS Government intensified negotiations with representatives of the Acron group in Brazil so that the process of selling UFN3, in Três Lagoas, could be continued. “The Semagro and Sefaz teams met systematically with Acron's management and there was a presentation of the company's business plan. It so happens that this business plan only provided for the installation of a fertilizer mixer”, he informed.

According to Verruck, “the State Government understood that this business plan was not adequate, as it did not meet the aspirations of the industrial policy of Mato Grosso do Sul and the aspirations of the Brazilian industrial policy, which is to have a fertilizer production unit and nitrogenous. As a result, we rejected Acron's business plan”.

UFN3 had its construction work halted in December 2014, with around 80% of the works completed, after Petrobras broke the contract with the consortium responsible for building the factory which, at the time, had already consumed more and R$ 3 billion.

One of the largest petrochemical companies in Latin America to buy UFN3

Petrobras' fertilizer plant is already in the sights of new companies. In order to expand its operations in the sector, Unigel, one of the largest petrochemical companies in the production of nitrogen fertilizers in Latin America, is interested in purchasing the project designed to produce urea and ammonia, aiming to expand its operations in the sector. The information was confirmed by the CEO to Reuters.

The unit's operation, which had a capacity designed by Petrobras at 3,600 tons/day of urea and 2,200 tons/day of ammonia, could help Brazil reduce its dependence on the imported product, as the country deals with difficulties arising from the war between Ukraine and Russia.

“The company already invests in fertilizers in Brazil, and is interested in completing the UFN-III and occupy 50% of the fertilizer market,” said one of the Reuters sources.

Unigel has more than 2.9 million tons of installed capacity, with 925 thousand tons of ammonia, 1.125 million tons of urea and 670 thousand tons of ammonium sulfate, according to company information.

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Flavia Marinho
Production Engineer post-graduated in Electrical Engineering and Automation. Experienced in the onshore and offshore shipbuilding industry. Get in touch for a suggestion of an agenda, disclosure of job vacancies or advertising proposal on our portal.