Shell-Backed Raízen Sells Its Argentina Fuel Arm to Mercuria

Brazil · Energy & Deals

The Raizen Argentina sale hands one of the country’s biggest fuel networks to a global trading house, and gives the debt-laden Brazilian group a badly needed cash injection in one stroke.

One of Brazil’s biggest companies is shrinking on purpose. Raízen, a giant in fuels and sugarcane ethanol, has agreed to sell its whole fuel business in neighbouring Argentina.

The buyer is Mercuria, a global energy-trading firm based in Switzerland. The headline price is well over a billion dollars, and Mercuria will also take on the debts of the Argentine arm.

For readers outside the region, Raízen is not a household name, but it is a heavyweight. It is a joint venture between the oil major Shell and Brazil’s Cosan, running thousands of Shell-branded filling stations.

What the Raizen Argentina sale includes

The package is substantial. At its heart is the Dock Sud refinery on the edge of Buenos Aires, which can process about 101,000 barrels of oil a day and ranks as Argentina’s third largest.

Alongside it comes a retail empire of roughly 800 service stations flying the Shell brand. Together they account for close to a fifth of all the petrol and diesel sold across Argentina.

The sale also sweeps in a lubricants plant, aviation-fuel operations and a string of storage terminals. In short, Mercuria is buying a ready-made, country-wide fuel business.

Why Raizen is selling

The motive is debt. Raízen has been straining under heavy borrowing after years of big spending, made worse by drought and wildfires that hurt its sugarcane harvests.

The pressure became impossible to ignore. The company has launched what is described as the largest out-of-court debt restructuring on record in Brazil, covering tens of billions of reais, and a major ratings agency cut its credit score deep into junk territory earlier this year.

Selling the Argentine business is the clearest move yet to fix that. Raízen says the proceeds will go straight towards repairing its balance sheet and focusing on its core markets.

Who is buying, and why it matters

Mercuria is one of the world’s largest independent commodity traders, in the same league as names like Trafigura and Vitol. It has spent recent years moving beyond pure trading to own physical assets, especially in South America.

It already has a foothold in Argentina through a stake in a company drilling the vast Vaca Muerta shale formation. Adding a refinery and a retail chain turns it into a fully integrated player, one that both pumps oil and sells the finished fuel.

That makes it only the third such integrated group in the country, after the state-controlled YPF and a venture part-owned by Britain’s BP. To win the assets, Mercuria saw off a bid from its rival trader Vitol.

The Argentine backdrop

Timing is everything. The purchase is a bet on Argentina under President Javier Milei, whose government has scrapped the price controls on crude and fuel that long deterred outside investors.

For a trading house, owning refining and retail in a market that is opening up offers both steady margins and a useful base. It is the kind of deal that would have looked far riskier only a few years ago.

What to watch next

The deal still needs regulatory approval and is expected to close within the year. For Raízen, the real test is whether this sale and its wider restructuring are enough to steady the ship.

For Argentina, it is a sign that foreign money is starting to flow back into a long-troubled economy. A familiar Shell forecourt may soon answer to a new owner, but the bigger story is the changing map of who controls the country’s energy.

Connected Coverage

For more on the forces reshaping corporate Brazil, see our reporting on the buyout firm bidding to seize control of Raízen and on the debt restructuring at petrochemical maker Braskem.

Frequently Asked Questions

What is Raizen selling in Argentina?

Raizen is selling its entire downstream fuel business in Argentina to the energy trader Mercuria for well over a billion dollars. The assets include the Dock Sud refinery near Buenos Aires and a network of roughly 800 Shell-branded service stations.

Why is Raizen making the sale?

The company is cutting a very heavy debt load built up through high spending and poor sugarcane harvests. The cash from the sale will help fund the largest out-of-court debt restructuring on record in Brazil.

Who is Mercuria and why does the deal matter?

Mercuria is one of the world’s biggest independent commodity traders, based in Switzerland. Buying a refinery and retail chain turns it into one of only three integrated oil players in Argentina, a bet on the market opening up under President Javier Milei.