Petróleo Brasileiro S.A. $PETR3 (+1.01%)
$PETR4 (+1.2%) is close to reaching an agreement with Unigel to resume management of two important fertilizer plants in northeastern Brazil. These plants were leased to Unigel in 2019 as part of Petrobras' divestment strategy.
Under the proposed agreement, PBR will manage the facilities and Unigel will be contracted to operate and maintain them for five years.
Although Unigel has agreed to the deal, management is awaiting a report from PBR's fertilizer working group before approving the deal.
An insight into the main fertilizer plants:
The two key fertilizer plants were leased to Unigel in 2019 as part of PBR's divestment strategy. However, high natural gas prices made the plants unprofitable and meant that they could no longer be commissioned in 2023.
In 2023, the Brazilian president wanted to resume operation of both plants in order to reduce the country's dependence on fertilizer imports, whereupon PBR changed its strategy. The two companies agreed on a tolling contract in which PBR would supply natural gas in return for fertilizer. However, the tolling agreement fell through as it would have resulted in a loss of $79.81 million for Petrobras.
However, the ongoing negotiations aim to provide both parties with a sustainable and profitable framework.
Petrobras' 2025-2029 business plan underlines the importance of the fertilizer segment in its portfolio.
By integrating fertilizer production with the goals of the oil, gas and energy transition, the company aims to develop new sources of revenue while meeting the needs of domestic agriculture.
The revitalization of these assets also reflects Brazil's broader commitment to economic self-reliance and sustainable growth.