Petroleo Brasileiro SA, better known as Petrobras, is accelerating its re-entry into the fertilizer industry amid Brazil’s booming agricultural sector. The state-controlled oil giant is considering an $800 million investment to advance the development of the UFN-III fertilizer plant, according to sources familiar with the matter.
Petrobras, which exited the fertilizer market in 2018, is now aiming to capitalize on the sector’s growth as Brazil continues to rely heavily on fertilizer imports. The ongoing conflict in Ukraine has further disrupted global fertilizer supplies and driven up prices, prompting President Luiz Inacio Lula da Silva’s administration to prioritize the revival of domestic production.
The UFN-III plant, located in Brazil’s central west, was left unfinished in 2014, with approximately 80% of the construction completed. Petrobras is currently reviewing the $800 million investment estimate and exploring potential partnerships. Details about the investment are expected to be included in Petrobras’s spending plan for 2025-2029, which will be unveiled in November, with work on the project potentially resuming as early as December.
In response to inquiries, Petrobras stated that the project is still under evaluation and that no specific investment figures have been confirmed. The company is focusing on resuming operations at existing assets, with four currently halted fertilizer plants having the capacity to meet 35% of Brazil’s urea demand. Last month, Petrobras announced the planned reopening of its Araucaria fertilizer unit by May 2025 and is in discussions with Unigel to address issues related to leased nitrogenous units in Bahia and Sergipe.
Additionally, Petrobras is investing in innovative approaches within the fertilizer industry, including the production of green ammonia. The company has also partnered with Brazilian agricultural research firm Embrapa to explore sustainable inputs and products, including fertilizers.
