Petrobras signs contract to sell RLAM refinery to Mubadala Capital

RIO DE JANEIRO (Reuters) – Petroleo Brasileiro SA said on Wednesday it had signed the contract to sell its RLAM refinery to Abu Dhabi’s Mubadala Capital for $1.65 billion, in a victory for outgoing Chief Executive Roberto Castello Branco.

Earlier on Wednesday, Petrobras said its board had authorized the sale to Mubadala Capital, under the aegies of its MC Brazil Downstream Participações unit.

Petrobras is currently selling off eight refineries in a bid to reduce debt. It is also attempting to break its own virtual refining monopoly in Brazil, which has proved a major issue as the company has come under frequent political pressure to lower domestic fuel prices.

Brazilian President Jair Bolsonaro fired Castello Branco after the company hiked fuel prices several times. It is not clear if the incoming administration at Petrobras, set to take office in April, will be as committed to selling downstream assets.

The sale of the refinery must still be approved by Brazil’s Administrative Council for Economic Defense (CADE), a regulator, Petrobras said.

The company announced the sale in principal in February, but its approval by the board – which itself will experience major changes in April – was a key step.

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