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Petrobras Agrees to Sell Okinawa Refinery to Taiyo Oil

Reuters, October 18, 2016
Reuters

Brazil's state-controlled oil company Petrobras said on Monday it has agreed to sell its mothballed Okinawa refinery and related assets to Japan's Taiyo Oil Co. for $129.3 million, according to a securities filing. Known as Nansei Seikyu, the Okinawa refinery company supplies about half the fuel needs for the Japanese island, has a capacity to produce 100,000 bpd, is home to 36 storage tanks that can hold 9.5 million barrels of petroleum and derivatives, and port facilities, Petrobras said. The sale was approved by the board of directors on Monday as the financially troubled company moves ahead with a plan to sell $15.1 billion of assets by the end of this year in an effort to cut the company's nearly $125 billion of debt, the largest in the world oil industry.

Petrobras agreed to buy 87.5 percent of Nansei Sekiyu in 2007 for about $50 million from a unit of ExxonMobil Corp as it was looking for places to refine its growing crude oil exports from the Campos Basin near Rio de Janeiro and expand its crude and products trading business around the world. It bought the rest of the refinery in 2010. A year later it said it was considering selling the operation, but no buyers materialized. It was eventually forced to close refining operations at the facility last year. At the same time it promised the Japanese government that it would continue to use and expand the storage and terminal facilities at Nansei Sekiyu to supply fuel to Okinawa and then sell the operation to another company.

 

(Reporting by Jeb Blount; Editing by Sandra Maler, Bernard Orr)

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