French energy giant TotalEnergies has agreed to divest its Brazilian fuel distribution network to SIM Distribuidora, aligning with its strategic focus on core markets.
The deal includes approximately 240 service stations and several storage facilities for petroleum products and ethanol.
Despite this divestiture, TotalEnergies will maintain its lubricants blending and distribution activities within Brazil.
SIM Distribuidora, part of Grupo Argenta, is a key fuel distribution company in Brazil, operating more than 500 service stations, along with lubricants and aviation businesses.
The acquisition is contingent upon receiving approval from the appropriate authorities.
TotalEnergies has been active in Brazil for nearly five decades, operating through five subsidiaries and employing more than 3,500 individuals across various sectors, including exploration and production (E&P), gas, renewable energy (solar and wind), lubricants and chemicals.
The company currently holds 11 licences in its E&P portfolio, with four of those being operated by TotalEnergies.
In 2023, the average production in Brazil was expected to reach around 140,000 barrels of oil equivalent per day.
The French energy major has also been investing in Brazil's renewable energy sector, having partnered with Casa dos Ventos in October 2022 to jointly develop a 12GW portfolio.
Last week, TotalEnergies said it is expecting a significant decline in its third-quarter (Q3) earnings, primarily due to a substantial decrease in refining margins across Europe and other regions.
In a preview of its Q3 earnings, the company attributed it to a 65% reduction in refining margins and a concurrent fall in global oil prices.
The European Refining Margin Marker for TotalEnergies was reported at $15.4 per tonne (t) in Q3, a stark contrast to the $44.9/t recorded in the preceding quarter.
The energy sector has been facing headwinds, with BP, Shell and ExxonMobil also issuing warnings of weaker earnings.
A 17% fall in oil prices during Q3 – the most significant quarterly drop in a year – has raised concerns about the global demand for oil.
