Petrobras Advances Divestment Drive With Japan Refinery Sale

  • Leads Ibovespa with 4.1% gain, stock at highest since 2014
  • $129 million sale to Taiyo Oil Co. includes piers, storage

Petroleo Brasileiro SA’s shares drove gains in Brazil after announcing the sale of a shuttered refinery in Japan for $129 million as it looks to raise cash and scale back international operations.

State-controlled Petrobras agreed to sell the 100,000-barrel-a-day Nansei Sekiyu refinery in Okinawa to Tokyo-based Taiyo Oil Co., it said in a statement late Monday. The deal includes three piers and 9.5 million barrels in storage capacity for crude and oil products, the Rio de Janeiro-based oil producer said, adding that the refinery isn’t currently operating.

Shares rose as much as 4.4 percent in Sao Paulo, the biggest intraday gain since Oct. 5. Petrobras, which has been at the center of a corruption scandal in Brazil, has surged more than 100 percent since Pedro Parente became chief executive officer on June 2, overseeing an acceleration of asset sales and growing production at deep-water fields. Petrobras has also benefited from a general rebound in Brazilian equities on optimism that the Michel Temer administration will end political stalemate and recession.

The announcement follows nearly $10 billion in asset sales since last year as Petrobras scaled back operations in Latin America and sold oil fields in Brazil. Petrobras has $40 billion worth of assets it’s marketing to potential investors in an effort to slash leverage and help finance its business plan, Chief Executive Officer Pedro Parente said in an Oct. 7 interview.

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