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Sources: Brazil's Unigel approves Petrobras' deal on fertilizer factories

Two sources familiar with this matter say that the board of directors at Brazilian chemical company Unigel approved on Friday a deal proposed to them by Petrobras in order to settle legal disputes relating fertilizer plants located in the northeastern part of Brazil.

The agreement would allow Petrobras, the state-run fertilizer company to resume operations at the two plants located in the states Sergipe and Bahia. This is part of President LuizInacio Lula Da Silva's efforts to reduce Brazil's dependence on imported fertilizer.

Petrobras leased two nitrogen fertilizer facilities to Unigel under a 10-year contract in 2019. However, both plants have been closed since 2023. Unigel has cited unfeasible conditions for operating due to the high natural gas price in Brazil.

According to Petrobras, the deal will reestablish Petrobras ownership over the two facilities, and operations are set to resume following a process of contracting services to operate and maintain them. Reporting by Marta Nogueira, Rodrigo Viga Gaier and Gabriel Araujo. Editing by Leslie Adler, Chizu Nomiyama and Leslie Adler.

(source: Reuters)