By Fabio Teixeira and Marta Nogueira
RIO DE JANEIRO, Jan 10 (Reuters) – Brazil’s state-run oil firm Petrobras is near a deal that would allow it to resume management of two fertilizer plants in the northeast of the country that had been leased to chemical firm Unigel, two sources with knowledge of negotiations told Reuters.
Under the new arrangement, Petrobras would manage the plants, while Unigel would be hired to operate them and provide maintenance for five years, said the sources. It was not immediately clear how much Petrobras would pay for the services.
Unigel has already agreed to the deal, but Petrobras’ management is waiting for a report by the company’s working group on fertilizers to approve it, according to one of the sources. Once a deal is signed, operations at the two plants could restart before the end of the first semester, the source added.
Petrobras did not immediately reply to a request for comment. Unigel said it would not comment.
The two plants were leased to Unigel in 2019 as part of a divestment strategy by the oil firm. But both plants stopped operating in the second half of 2023, amid high natural gas prices that, according to Unigel, made the plants unprofitable.
When Brazil President Luiz Inacio Lula da Silva took office in 2023, the two plants became strategic to his plans to ease Brazil’s dependence on imported fertilizer, and Petrobras reversed its strategy.
In late 2023, the two firms agreed to a “tolling” arrangement in which Petrobras would supply natural gas in return for fertilizers. The deal would have eased Unigel’s concerns about fuel prices and allowed the plants to restart production. But it fell through last June without taking effect after Brazil’s federal audit court (TCU) said it could cause a loss of 487 million reais ($79.81 million) to Petrobras.
The new deal which the two firms are negotiating would help Unigel’s finances, because the firm loses money every month to maintain the plants. When both plants were operational, they made Unigel the largest Brazilian producer of nitrogen fertilizers.
(Reporting by Fabio Teixeira and Marta Nogueira in Rio de Janeiro Editing by Matthew Lewis)