Petrobras is launching the binding phase of the sale of four refineries out of eight that it has earmarked for divestment, the Brazilian state-held energy firm said in a statement.
The potential buyers that had qualified for the binding phase will receive a letter with details on the divestment process, including guidance for due diligence and filing of binding proposals, Petrobras said.
In late April, Petrobras approved the sale of eight refineries as part of its divestment plan. In May, the energy firm struck a deal with the Brazilian antitrust regulator that will allow it to sell those downstream assets in a bid, the company said, to encourage greater competition in the industry.
The four refineries in the this first binding phase are RNEST in Pernambuco state with a processing capacity of 130,000 bpd, or 5 percent of Brazil's total oil refining capacity; RLAM in the state of Bahia with capacity of 333,000 bpd, or 14 percent of Brazil's total oil refining capacity; REPAR in the Paraná state with capacity of 208,000 bpd; and REFAP in the state of Rio Grande do Sul, also with 208,000-bpd capacity.
In August, reports emerged that the world's top commodity traders along with several oil majors are among the bidders for the eight refineries that the Brazilian government wants to privatize.
Glencore, Trafigura, and Vitol are all among the bidders, and so are Chinese CNPC and Sinopec, as well as Saudi Aramco, which has been working on building its downstream footprint internationally, Reuters reported.
Related: US Refiners Reduce Crude Processing For First Time Since 2009
The eight refineries have a combined capacity of 1.1 million bpd and all eight sales could generate as much as US$18 billion, according to bankers involved in the privatization.
The refineries are likely to be sold to different buyers as ordered by competition regulator CADE. The watchdog made Petrobras change its divestment process so that one company could not buy the two largest refineries in a single region of the country.
Petrobras is also selling some upstream assets as part of the asset sale plan, which is also aimed at reducing the company's huge debt. In early August, Petrobras launched the binding phase of the sale of offshore upstream oil and gas assets in the EspÃrito Santo Basin.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More