By an OGJ correspondent
RIO DE JANEIRO, Apr. 4 -- Petroleo Brasileiro SA (Petrobras) said it plans to invest $6.4 billion during 2003—a cut of one third of its previously planned investments for this year, the company reported.
Petrobras said the amount is still under discussion but could be approved at a meeting of the company's management council Apr. 11.
Newly elected Petrobras Pres. José Eduarto Dutra said the company is expected to generate a primary budget surplus of $2.1 billion this year (OGJ Online, Jan. 3, 2003).
This amount corresponds to a significant portion of the primary surplus state-run companies are expected to produce to help the government meet its surplus target of 4.25% of GDP this year.
Dutra said Petrobras would focus primarily on exploration and refining this year, while allocating smaller investments to electricity, gas, and telecommunications.
In the first 2 months of the year, Petrobras outlays totaled $539 million, compared with $798 million for the group of 58 federally controlled companies.
Petrobras mulls new refinery
Separately, Petrobras is deliberating the location of a new 200,000 b/d refinery. The proposed plant would be built in partnership with the private sector.
However, Dutra cautioned that the company might simply invest in the expansion of existing refining facilities in order to cater to the growing demand for oil products. Expansions would require an outlay of only $900 million, compared with $2 billion for a new refinery, Dutra said.
In mid-February Petrobras awarded a $7 million contract to Austin, Tex.-based Emerson Process Management to provide engineering and project management services for improved automation at Replan, its largest refinery, at the Paulinia complex in Sao Paulo. That project will expand and upgrade all the Replan instrumentation and controls, which could lead to a 7% increase in production above the refinery's current 352,000 b/d level.
Emerson also will upgrade instrumentation at the 151,000 b/d Regap refinery (OGJ Online, Feb. 28, 2003).
The federal government will give the final word on the location of a new refinery, Dutra added. No fewer than 12 Brazilian states seek to attract that investment, which would create at least 600 jobs.
According to Dutra, however, there is a good chance the new plant will be built in Brazil's Northeast.
Mines and Energy Minister Dilma Rousseff, who is also a member of the Petrobras administrative council, said the region should be the recipient of the investment under the federal government's regional development program.
A study conducted by Portuguese oil company Petrogal SA has identified the Brazilian state of Pernambuco in the northeast as the country's most suitable location for a new refinery.
Petrogal has considered investing in refining in partnership with Petrobras and Petroleos de Venezuela SA with which it already has inked a preliminary accord.
Petrogal concluded that Pernambuco has the best port of the Northeast. Apart from that, it is at a 300 km radius from the main consumer markets of the region, which facilitates the logistics of oil products distribution, the study concluded.