Brazilian state-run oil company Petróleo Brasileiro (Petrobras) has terminated a contract for the sale of its Lubrificantes e Derivados de Petróleo do Nordeste (LUBNOR) refinery in north-eastern Brazil.

In May 2022, Petrobras agreed to sell the LUBNOR refinery and its associated logistics assets to Grepar Participações (Grepar) in a deal worth $34m (166.6m reais).

The latest decision comes as Brazilian special purpose company Grepar failed to meet compliance standards for the deal.

In a press statement, Petrobras said the contract was terminated “due to the lack of compliance with Conditions Precedent established therein until the Final Deadline defined in such contract (11/25/2023), despite the best efforts undertaken by Petrobras to conclude the transaction”.

The oil giant will now continue to maintain operations at the LUBNOR refinery.

Located in Fortaleza, Ceará, the LUBNOR refinery has a permit to process 8,200bopd.

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By GlobalData

Currently, the refinery accounts for 10% of the country’s asphalt production and meets demand from the north and north-east states.

Furthermore, the LUBNOR refinery is Brazil’s only producer of naphthenic base oils. It also produces naphtha, fuel oil and marine diesel.

In a press statement, Petrobras said: “Petrobras reinforces its commitment to LUBNOR’s operational continuity, to the reliability and availability of its units and to ensuring safety and respect for the environment and people.”

Earlier in 2023, Grepar said it planned to increase the refinery’s asphalt production by 30% upon completion of the acquisition.

Recently, Petrobras unveiled plans to invest $102bn over the next five years as part of its strategic plan for the 2024–28 period.