Brazilian state-run oil company Petroleo Brasileiro SA has decided to terminate the process to sell fertilizer subsidiary Araucaria Nitrogenados, it said in a statement late on Monday.

The announcement came after newspaper Valor Economico reported that Petrobras' plans to sell the unit to Norway's Yara would not materialize.

The decision also follows requests from President-elect Luiz Inacio Lula da Silva's transition team for Petrobras to halt divestments so they could have time to decide which asset sales would go ahead in coming years.

Lula, who takes office from incumbent Jair Bolsonaro on Jan. 1, has bashed Petrobras fertilizer divestments ahead of this year's election and said he would work for Brazil to become self-sufficient in fertilizers.

The South American agricultural powerhouse is highly dependent on fertilizer imports, buying some 85% of demand from other countries. After the start of the war in Ukraine, interest in local projects was rekindled.

Petrobras' Araucaria Nitrogenados owns a plant in the Southern state of Parana with an output capacity of 1,975 tonnes of urea and 1,303 tonnes ammonia per day. The plant is currently idled, according to the company.

The oil giant said it would "evaluate" next steps regarding the Araucaria divestment, without providing further detail.

Source: Reuters