Brazil’s Petrobras Considers Downsizing Logistics Unit

RIO DE JANEIRO, BRAZIL – (Reuters exclusive) Brazilian state-run oil firm Petrobras is studying a mass transfer of employees out of its Transpetro logistics unit, according to a document seen by Reuters, in a sign the company may be gearing up to privatize additional assets.

The human resources departments of “Petróleo Brasileiro SA”, as the company is formally known, and Transpetro are developing an “action plan for the evaluation and possible return of employees ceded to Transpetro from the parent company,” according to the document, dated July 24th.

It is common at Petrobras for employees to be hired by the parent company and later transferred to a subsidiary. Such workers technically remain employed by the parent company and are transferred back to Petrobras if a unit is privatized.

A similar process occurred at fuel distribution unit “Petrobras Distribuidora SA”, according to two sources familiar with the matter, before it was privatized via share offering this month. Transpetro had 6,435 employees at the end of 2016, 1,090 of whom had been “ceded” to the company by Petrobras, according to the company.

“After individual evaluations, human resources will consolidate the information and, together with executive managers, come up with a return plan for employees,” reads the internal Petrobras document about workers ceded to Transpetro.

Asked about the plans, Petrobras said that it is “constantly carrying out evaluations of the profile and quantity of its personnel, taking into account goals, competencies and knowledge.”

Petrobras Chief Executive Roberto Castello Branco, who took the reins in January, is working to sell midstream and downstream assets in a bid to reduce debt and sharpen the focus on offshore oil exploration and production.

In April, Petrobras agreed to sell a collection of gas pipelines to France’s Engie SA for US$8.6 billion (R$34.4 billion). The firm is also considering the sale of eight refineries. Castello Branco said this would fetch US$15 billion.

While the refineries are not part of the Transpetro unit, formally known as “Petrobras Transporte SA”, Petrobras will be selling a number of associated pipelines and terminals, which are part of Transpetro.

Transpetro operates over 7,500 km (4,660 miles) of oil pipelines, according to its website, and has a fleet of over fifty ships, among other assets. It reported net revenue of R$10.4 billion in 2018, contributing about two percent of the parent company’s revenue.

(Source: Reuters)