Brazil’s state-run oil company Petrobras said on 21 October that is in talks to sell its stake in sugar and ethanol producer Guarani SA to French sugar group Tereos Internacional, reports the Wall Street Journal (WSJ).

Petrobras had previously announced on 20 September that it was exiting the biofuels sector to reduce its debts.

It has a 45.9% stake in Guarani and WSJ said it had hired Banco Itaú BBA to advise on the sale process. Guarani owns seven sugar mills with a combined production capacity of 1.7M tonnes of sugar and 900M litres/year of ethanol.

Petrobras has a significant portfolio in biofuels in Brazil. As well as its stake in Guarani, it also owns 49% of Boa Vista mill in Goiás state, a joint venture with Brazilian sugar and ethanol company São Martinho; and a 40% stake in the Bambui mill in São Paulo state, according to Reuters.

It also owned three biodiesel plants in Minas Gerais, Bahia and Ceará states and had a 50% stake in local biodiesel producer BSBIOS, which managed two large plants in the states of Paraná and Rio Grande do Sul, Reuters added.

According to a Biofuels Digest report on 10 October, Petrobras is closing its biodiesel plant in Quixadá, Ceará in November. The remaining two plants in Montes Claros, Minas Gerais; and Candeias, Bahia, are continuing operations.

Petrobras is planning to sell US$15.1bn of assets by the end of this year, and US$19.5bn of assets in 2017-18.