MOSCOW (MRC) -- Brazil’s state-run oil company Petrobras has reached a deal to sell the fertilizer plant UFN3 to Russia’s Acron Group, according to Investing with reference to confirmation in Petrobras' securities filing on Friday.
Earlier, Brazil’s Agriculture Minister Tereza Cristina Dias announced the sale, saying she was briefed by Petrobras Chief Executive Joaquim Silva e Luna and Mining and Energy Minister Bento Albuquerque on the deal for the plant, which has been up for sale since 2017.
Petrobras and Dias did not provide a price for the deal. Dias said that should be one of the topics of President Jair Bolsonaro’s official trip to Russia Feb. 14-17.
The signing of the agreement depends on Petrobras and government approvals, it said in the securities filing.
Acron, a leading mineral fertilizer producer in Russia and globally, had been in talks with Petrobras about buying the plant in 2018 that were suspended and resumed last year.
The designed capacity of the UFN3 plant, also known as Nitrogen Fertilizer Unit III, is 800,000 tons of ammonia and 1.3 million tons of carbamide per year.
As MRC reported earlier, Russia introduced a two-month ban on the export of ammonium nitrate on February 2, 2022. The corresponding government decree was signed, the press service of the Cabinet of Ministers reported. "This is a temporary measure, the remaining volume can be exported from April 2, when Russian enterprises will receive ammonium nitrate in the required volume, and demand for it in the domestic market will peak," said First Deputy Prime Minister Andrey Belousov, whose words are quoted in the message.
According to VTB Capital's analysts, a two-month ban on the export of ammonium nitrate will not have a significant impact on producers: the falling volumes are insignificant and can be compensated after the restrictions are lifted. According to them, 60% of the ammonium nitrate produced in Russia is consumed domestically (45% in agriculture and 15% in industry). The largest producer is Akron, whose ammonium nitrate accounts for about 30% of sales.
Acron Group is Russia's leading vertically integrated producer of NPK compound fertilizers and is one of the top ten global leaders in terms of NPK production capacity. The company operates two chemical plants and a mining and processing plant in Russia with a total production capacity of over 8 million tons of end products.
Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
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