Brazil’s Raizen SA is reportedly selling its oil refinery and gas stations in Argentina, hiring JPMorgan for management. This follows exits by other multinationals amid economic reforms. Raizen’s assets include the Dock Sud refinery and 700 gas stations, representing a significant market share. The sale reflects changes in the Argentine energy landscape as President Milei seeks deregulation.
Raizen SA, a Brazilian energy firm, is reportedly exploring the sale of its oil refinery and network of gas stations in Argentina. The company, a joint venture between Shell Plc and Cosan SA, has engaged JPMorgan Chase & Co. to oversee the sale process, as indicated by sources who requested anonymity.
The potential divestment of Raizen’s assets in Argentina aligns with a trend among multinational companies, such as Exxon Mobil and Mercedes-Benz, that have exited the country in recent months. This trend persists even as investor confidence appears to grow amidst President Javier Milei’s economic reforms aimed at deregulation.
Raizen, the leading producer of ethanol fuel in Brazil, is reconsidering its expansion strategy due to increased borrowing costs impacting its finances. The Dock Sud oil refinery, located in Buenos Aires, is the oldest in Argentina, with a capacity of 100,000 barrels per day, following only YPF SA facilities. Additionally, Raizen operates roughly 700 gas stations that represent 18% of the nation’s gasoline and diesel market.
The company acquired these assets for nearly $1 billion in 2018 from Shell during a phase when Argentina explored market reforms. After a period of government intervention from 2019 to 2023, the nation elected Milei, who is aggressively pursuing economic deregulation, particularly in the energy sector. As a result, controls on fuel prices have been removed, aligning domestic prices with international rates, affecting local refiners differently over time.
Raizen’s decision to explore the sale of its Argentine assets, facilitated by JPMorgan, reflects ongoing shifts in the multinational business landscape following regulatory changes under President Milei. As investor sentiment improves, this move may signal broader economic changes within Argentina’s energy sector, particularly in the wake of previous government interventions. This divestment is part of a larger trend of international companies reassessing their commitments in Argentina.
Original Source: www.livemint.com
