Brazilian state-controlled oil giant Petrobras is reportedly evaluating an investment in Raizen, a major player in the sugar and ethanol industry, as part of its strategy to return to the ethanol sector, according to a report by O Globo published Saturday, citing unnamed sources.
The move marks a possible reversal from Petrobras’s 2017–2021 strategic plan, which outlined a complete exit from biofuel production. Raizen, meanwhile, is said to be open to bringing on a new partner as it navigates financial headwinds.
Neither Petrobras nor Raizen responded to requests for comment at the time of publication.
According to O Globo, a decision from Petrobras could come by the end of the year. Options under consideration include forming a partnership with Raizen or acquiring certain assets from the company.
Raizen is the world’s largest sugar producer and one of the leading ethanol manufacturers, jointly controlled by Shell (SHEL.L) and Brazilian conglomerate Cosan (CSAN3.SA). The company also has operations in fuel distribution.
Earlier this week, Raizen acknowledged the potential entry of a new shareholder following disappointing financial results that sent its shares to a record low. Cosan noted that bringing in a partner is “an option we like.”
Raizen has been dealing with a combination of operational difficulties and a heavy debt load. Recent steps to reduce its leverage have included selling off assets and closing a major production facility.
