Petroleo Brasileiro SA, as the state-controlled company is formally known, must follow specific rules aimed at keeping asset sales competitive, including that bids be different.
The company also considered the offers low and is asking bidders to raise their bids, according to two people involved in the negotiations who declined to be named as information is private.
Petrobras doesn’t rule out keeping the asset if prices don’t meet the minimum range set by its internal technical team, the people said.
Petrobras said in the statement three separate groups led by Ultrapar, Raizen and China’s Sinopec are part of this phase of the competition. The producer did not give any details about the companies’ bids. The prices are highly secret in this phase of the competition.
Located in the southern Brazilian state of Parana, Repar is Brazil’s fifth-largest refinery, able to process 208,000 barrels per day, representing 9% of the country’s capacity.
The winner of this phase of the competition will be able to exclusively negotiate the contract terms with Petrobras, a process which can take months.
According to Petrobras’ internal rules, if the contract terms substantially change after the negotiation, which often happens, the oil company would need to call back competitors for a third round of bids, based on price only.
Raizen, a joint venture between Royal Dutch Shell Plc and Brazilian ethanol producer Cosan SA, teamed up with U.S.-based private equity firm Global Infrastructure Partners (GIP).
The bids come as Brazil’s Supreme Court considers blocking Petrobras’ sale of Repar and other refineries, with justices set to rule on the matter by Friday. (Reporting by Sabrina Valle, additional reporting by Gabriel Araujo, editing by Chris Reese and Sonya Hepinstall)