RIO DE JANEIRO/SÃO PAULO - Brazilian group Ultrapar Participacoes SA offered the highest price for Petrobras’ refinery Refap and is leading talks to acquire the facility in the southern state of Rio Grande do Sul, three people close to the matter said. Brazil has been trying sell eight refineries, which would end Petrobras’s virtual monopoly in the country’s refining sector and open one of the world’s largest fuel markets to private investors. Petrobras is currently negotiating five of them with the highest bidders. Petroleo Brasileiro SA, as the state-controlled producer is known, is trying to get Ultrapar to boost its offer before agreeing to exclusive talks, three of the people said. Offers below Petrobras’s initial price range have made the company miss its internal deadline to sign a deal by the end of 2020. Petrobras and Ultra declined to comment. Raízen, a joint venture between Royal Dutch Shell PLC and Brazilian ethanol producer Cosan SA, has also bid for Refap, two of the people said. A second round of offers hasn’t been ruled out, the people said. Raízen declined to comment. Indian conglomerate Essar Group, which had pre-qualified for the binding phase, dropped out of the competition, the people said. Ultrapar and Raizen have also bid for refinery Repar, which supplies the relatively affluent states of Parana, Santa Catarina, Sao Paulo and Mato Grosso. Petrobras has hesitated to designate a winning bidder because it considers the prices too low, three of the people said. Refap and Repar are located in Brazil’s southern region and have a production capacity of 200,000 barrels per day each, or about 18% of the country’s capacity. Antitrust rules would bar Petrobras from selling the units to the same firm. Elsewhere, Petrobras is in exclusive talks with Abu Dhabi investor Mubadala Investment Co to sell its Bahia unit RLAM. Those talks, at a more advanced stage, could bring a deal as soon as this month, two of the people said. The producer is also negotiating the sale of its REMAN, LUBNOR and SIX refining units, one of the people said. No exclusivity was set, which allows rebids, the person said. DIVESTMENT PLANS Petrobras has been trying to sell refineries for almost a decade with no success, facing resistance from politicians, union workers and local contractors. A history of government fuel price intervention has also scared away investors in the past. Chief Executive Roberto Castello Branco, who took office in January 2019 appointed by president Jair Bolsonaro, relaunched the process as part of a plan to focus on deep-water exploration and cut debt. On December 2019, Petrobras signed an agreement with antitrust watchdog Cade to privatize eight refineries, or about half of Brazil’s fuel production capacity, by Dec. 2021. Petrobras has told potential buyers it is not obliged to sell the plants if offers fall below its internal price range. A decrease in fuel demand accelerated by the Covid-19 pandemic is a key reason behind the price gap between Petrobras and potential buyers, three of the people said. The sales will also allow Petrobras to raise fresh money and reduce debt.