Petrobras seeks to sell Texas refinery

Brazilian state-controlled energy giant, Petróleo Brasileiro SA (Petrobras) is seeking to sell its refinery in Pasadena, Texas, Bloomberg yesterday reported, citing two sources.

Petrobras is seeking around $200 million, far lower than its purchase price of $1.2 billion, the report said.

Petrobras had paid $1.2 billion in two installments in 2006 and 2012.

Federal prosecutors, who are currently investigating corruption at Petrobras, are also probing whether bribes were paid while buying the refinery.

Petrobras' 110,000-barrel-a-day refinery was shut down early this year over cooling tower leak that lasted for 72 hours.

This incident, which caused environmental liabilities, may also have reduced the value of the refinery.

Despite this, a sale could see Petrobras nearer to its goal of divesting up to $21 billion in assets by the end of 2018 in order to cut its massive debt.

Petrobras had in 2015 announced that it plans to sell $15.1 billion of assets in 2015 and 2016 in order to reduce its $130-billion debt, but was able to sell assets worth only $3.9 billion in the face of stiff employee and union opposition to any divestment.

The Rio de Janeiro-based company is currently the world's third most-indebted non-financial company and has already been rated as junk by the three major credit rating companies.

But the disinvestment drive has picked up momentum and Petrobas managed to sell 90 per cent of its natural gas pipeline network last year to a consortium led by Canada's Brookfield Asset Management for $5.2 billion.