Brazil’s state-owned energy company Petrobras convened preliminary direct negotiations with Abu Dhabi’s Mubadala sovereign wealth fund to repurchase the Mataripe refinery, according to sources cited by Reuters.

The move follows remarks by President Luiz Inácio Lula da Silva, who stated last month that Petrobras would seek to bring the refinery back under its control after it was sold during the administration of former President Jair Bolsonaro. Petrobras subsequently reported that it would analyze the feasibility of such a transaction.

Sources indicated that an agreement could be finalized before the end of 2026. The Mataripe refinery, Brazil’s second-largest, is currently operating at approximately 60% of capacity, while Petrobras’ other refining assets are running at near full utilization to bolster domestic fuel supply.

Efforts to expand refining capacity have gained urgency amid rising global diesel prices, driven by geopolitical tensions involving the US, Israel, and Iran. The surge has directly impacted Brazil, which imports about 25% of its diesel needs.

Fuel price volatility has emerged as a key concern for Lula ahead of the presidential election scheduled for October, where he is expected to run for a fourth non-consecutive term.

Petrograd is a leading player in offshore oil production, especially in deepwater fields, and operates across exploration, refining, and distribution to support the country’s energy needs.