Petrobras completes sale of Japanese downstream assets

Brazil's state-owned Petroleo Brasileiro SA (Petrobras) has finalized the sale of its Japanese refining business, including subsidiary Nansei Sekiyu KK’s 100,000-b/d idled Nishihara refinery on Japan’s southwestern island of Okinawa, to Taiyo Oil Co. Ltd., Tokyo (OGJ Online, Oct. 20, 2016).

Taiyo completed its purchase of the Petrobras Rotterdam-based subsidiary Petrobras International Braspetro BV’s 100% interest in Nansei Seikyu on Dec. 28, 2016, for $165 million after meeting all conditions stipulated in the original contract agreement signed in October 2016, Petrobras said.

Closing of the deal follows Petrobras’ previous announcement of its intention to exit the Japanese downstream sector as part of a broader divestment plan in line with the company’s overall financial and strategic goals of 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 (OGJ Online, Apr. 2, 2015).

Inclusive of the now-finalized sale of its Japanese downstream assets to Taiyo, Petrobras’ partnership and divestiture program has reached $13.6 billion for the 2015-16 biennium, the company said.

The 2015-16 divestiture total also includes the completed sale in early December of 100% interest in Chilean fuel distribution subsidiary Petrobras Chile Distribuición Ltda. to Southern Cross Group for $470 million, according to a Jan. 1 release from Petrobras (OGJ Online, Aug. 15, 2016).

Taiyo’s plans

Taiyo, which operates the 118,000-b/d Shikoku refinery at Kikuma (now part of Imabari), Ehime Prefecture, will continue to operate the Nansei Sekiyu oil terminal as part of a strategy to generate future synergies with the company’s existing oil business.

Future plans for the shuttered Nansei Sekiyu refinery, however, have yet to be disclosed.

Contact Robert Brelsford at rbrelsford@ogjonline.com.

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