2023-12-30 00:10:17
© Reuters.
By Patricia Vilas Boas and Marta Nogueira
SÃO PAULO/RIO DE JANEIRO (Reuters) – Petrobras (BVMF:) signed a custom industrialization contract with Unigel for the production of fertilizers at factories in Sergipe and Bahia, the oil company said in a statement to the market this Friday.
The agreement is the result of a partnership between the oil company and Unigel announced in June this year, to analyze joint businesses in the areas of fertilizers, green hydrogen and low carbon projects.
“Studies for the production of low-carbon projects will continue to be ongoing,” the company added this Friday.
The company, however, did not offer details about the new contract signed.
The CEO of Petrobras, Jean Paul Prates, had said in November that a custom industrialization agreement, or so-called tolling, could be a short-term solution to profitability problems faced by nitrogen fertilizer factories leased in Bahia and Sergipe to Unigel.
At the time, company executives stated that Unigel should remain as a tenant, but would act as a service provider. This way, Petrobras would deliver the gas for the operation, and the urea produced would come from the oil company.
When contacted this Friday to provide more details about the agreement, the oil company did not respond immediately.
For the long term, however, other solutions were being studied, such as the incorporation of the two plants back into Petrobras, as well as the possibility of creating a joint venture between Petrobras and Unigel, and even the attraction of a third partner for the business.
Recently, Unigel even put hundreds of employees on notice at the Bahia unit, which is currently at a standstill, claiming that the cost of gas did not justify the operation of the plant, but it backed down pointing out that it was in negotiations with Petrobras for a solution.
Fertilizer production in Brazil has been a flagship of the federal government, which wants to guarantee security of supply to the country, a large agricultural producer that imports most of its needs.
But the company’s current management also argues that the manufacture of fertilizers is strategic for Petrobras, especially in light of energy transition initiatives, since, through this approach, new products can be developed, such as green ammonia.
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