CADE extends deadlines for Petrobras' asset sale in oil refining and natural gas markets

On 28 April, the Administrative Council for Economic Defense (CADE) extended Petrobras' deadlines for the sale of oil refineries and assets in the natural gas market. The divestiture is part of the obligations undertaken by the state-owned company under two agreements aimed at fostering competition in the oil refining and natural gas markets.

Petrobras submitted CADE a request for rescheduling the sale, in light of problems with the divestiture process and the current economic landscape. Analysing it, the request was considered reasonable and granted by the Council’s Tribunal.

With the extension, the period set for the execution of sales agreements between the company and potential purchasers has been modified. The new deadlines are:

- by 30 April 2021 to sell the gas transporter Nova Transportadora do Sudeste (NTS);

- by 30 June 2021 to transfer its indirect stake in distributing companies, whether by transferring its shares in Gaspetro or transferring Gaspetro's shares in distributing companies;

- by 31 July 2021 to sell the following refineries: Refinaria Isaac Sabbá, Refinaria Lubrificantes e Derivados de Petróleo do Nordeste, and Refinaria Alberto Pasqualini;

- by 30 October 2021 to transfer refineries Refinaria Gabriel Passos, Refinaria Abreu e Lima, and its oil shale processing unit, Unidade de Industrialização de Xisto;

- by 31 December 2021 to sell refinery Refinaria Presidente Getúlio Vargas.

The deadline for concluding and consummating the sale is the same for all transactions, 31 December 2021.

Historic agreements

CADE entered into two historic agreements with Petrobras in 2019. The first, a Cease and Desist Agreement (a type of leniency programme) executed in June that year, dismissed the Council’s administrative investigation into claims that Petrobras abused its dominant position in the oil refining market.

Under the agreement, the company committed to sell eight of its refineries, including assets linked to fuel transport. The measure aims to increase competition in the national refining market by bringing in new entrants and, thus, attract investment in the sector. 

The second Cease and Desist Agreement, on the natural gas market, was signed in July 2019. The agreement mainly aims at mitigating major structural problems of this market, where the company has another near monopoly. The instrument encourages new entrant companies and national and international investment in the sector.

Under the agreement, Petrobras committed to sell oil transport companies Nova Transportadora do Sudeste, Transportadora Associada de Gás, and Transportadora Brasileira Gasoduto Bolívia-Brasil. Petrobras also agreed to transfer its indirect stake in distributing enterprises. Following the signature of the instrument, CADE terminated its investigation into allegations of Petrobras' possible anticompetitive practices in the natural gas market.