Brazilian state-run energy giant Petroleo Brasileiro SA (Petrobras) is to acquire balance 30% stake in local refinery Refap from Repsol YPF SA for US$850 million. Repsol had acquired 30% in 2001 from Petrobas in an asset exchange between the companies. With this acquisition, Petrobras once again holds 100% interest in Refap.

Petrobras will pay US$350 million for Repsol’s stake in asset and US$500 million for the corresponding portion of Repsol’s debt in Refap. Refap is the fifth largest refinery in Brazil with 190,000 bpd capacity. Current production consists mainly of diesel and gasoline, in addition to petrochemical naphtha, propylene, LPG, jet fuel, fuel oil, and asphalt.

In a statement, Petrobras reiterated that with the refinery being reintegrated to the company’s business, Petrobras seeks gains in logistics and to optimize the domestic processing and production of oil products, over and beyond to implement investments planned for the production of low sulfur content diesel, in compliance with current legislation.

Petrobras is a publicly traded corporation, the majority stockholder of which is the Government of Brazil, and performs as an energy company in the following sectors: exploration and production, refining, oil and natural gas trade and transportation, petrochemicals, and derivatives, electric energy, biofuel and other renewable energy source distribution.

As a leader in the Brazilian oil industry, Petrobras has expanded its operations aiming to be among the top five integrated energy companies in the world by 2020. The firm has a presence in 28 countries globally. The 2009-2013 business plan foresees investments in the order of $174.4 billion.

Repsol’s diversified projects portfolio in Brazil includes a producing field (Albacora Leste), one block under development (BM-S-7: Piracuca BA), two planned pilot projects (BM-S-9: Guara and Carioca) and fourteen exploration blocks with significant potential.

In October of 2010, Repsol signed an agreement with Sinopec to jointly develop exploration and production projects in Brazil and to create one of Latin-America’s largest energy companies, valued at $17.7 billion. The deal is still pending authorization by the competent authorities.

Brazil’s offshore is one of the world’s fastest-growing oil regions. The agreement between Repsol and Sinopec highlights the significant international interest in the historic moment which Brazil is experiencing, especially in the subsalt plays.

The deal is part of the Repsol Group’s divestment of non-strategic assets as laid out in the Horizon 2014 strategic plan. Specifically, this deal completes the process of divesting stakes in non-integrated downstream assets in Latin-America which Repsol began in 2007, it said.