Brazil's state-owned Petroleo Brasileiro SA (Petrobras) is initiating a plan to exit its Japanese refining business, which consists of wholly owned subsidiary Nansei Sekiyu KK’s 100,000-b/d Nishihara refinery on Japan’s southwestern island of Okinawa.
The exit plan, which is to occur over a yet-to-be disclosed period of time, will include termination of processing activities at the Nishihara refinery, Petrobras said in a notice to investors.
To ensure adequate fuel supplies to Okinawa during the withdrawal process, which will be conducted in close collaboration with Japan’s Ministry of Economy, Trade, and Industry, Petrobras will continue to operate the refinery’s associated marine terminal until the exit plan has been finalized, the company said.
Petrobras’s decision to shed its holdings in the Japanese downstream sector follows the company’s announcement last month that it would divest a total of $13.7 billion in global assets during 2015-16 as part of a financial plan aimed at reducing leverage, preserving cash, and focusing on priority investments that mainly involve oil and gas production in Brazil in areas of high productivity and return, according to a Mar. 2 release to investors.
Petrobras entered the Japanese refining sector following its acquisition 87.5% of Nansei from TonenGeneral Sekiyu KK for ¥5.5 billion in 2008 (OGJ Online, Apr. 2, 2008).
The Brazilian firm acquired the remaining 12.5% interest in Nansei from Sumitomo Corp. for an undisclosed sum in 2010 (OGJ Online, Apr. 6, 2010).