Sao Paulo: Brazilian state-owned oil company Petrobras is considering investing in sugar and ethanol producer Raizen as part of its plans to return to the ethanol business, according to a report by local newspaper O Globo on Saturday.
Petrobras had previously said it was eying a return to the ethanol sector after having announced in its 2017-2021 strategic plan it would no longer produce biofuels, while Raizen is open to a new partner as it faces financial hurdles, reported Reuters.
According to O Globo, Petrobras could reach a decision before the end of the year. Options under review include becoming a partner in Raizen or purchasing some of its assets.
Raizen, controlled by Shell and Brazilian group Cosan, is the world’s largest sugar producer and a leading ethanol supplier. The company also operates in the fuel distribution market.
Earlier this week, Raizen confirmed it was open to bringing in a new investor after posting weak financial results, which sent its shares to a record low. Cosan said the idea of adding a partner was “a possibility we welcome.”
Raizen has been struggling with high debt and operational challenges. To ease pressure, it has sold assets and shut down one of its major mills.
