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Brazil, Venezuela still wrangling over refinery project

According to the Wall Street Journal, Brazil’s state-run Petroleo Brazileiro SA (Petrobras) and Venezuela's Petroleos de Venezuela SA (PDVSA), continue to face difficulties in launching a troubled refinery joint venture, with a final agreement for the project once again delayed.

The paper cited Brazilian President Luiz Inacio Lula da Silva as saying that a final deal for the Abreu e Lima refinery in Brazil's Pernambuco state in the Northeast would be delayed until Oct. 16-17. No reason for the delay was given.

Petrobras and PDVSA have argued with each other for months over details of the multibillion-dollar project, which has been hit with cost overruns and allegations of overcharges.

The refinery negotiations turned contentious last year when PDVSA said it wanted better-than-market prices for the oil it would provide for processing at the refinery.

Each company was expected to provide half of the crude oil needed for daily processing. In addition, however, PDVSA wanted to sell oil products from the refinery in Brazil. Under the original proposal, oil products and derivatives from the refinery were to be exported.

Why is Venezuela being so difficult over this agreement? Or does the problem lie with Brazil?

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posted by: noreply@blogger.com

090929 :Brazil, Venezuela still wrangling over refinery project

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1 Comment:

anupam said...
I think this refinery will be more beneficial for Brazil as it's demand for oil products is increasing....but PDVSA's demand to charge high for their share of oil is not correct..

Tue Sep 29, 06:13:08 AM CDT

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Eric Watkins
OGJ Oil Diplomacy Blog
by Eric Watkins

Eric Watkins joined Oil & Gas Journal in 2001 as Middle East Correspondent and now serves as its Oil Diplomacy Editor, drawing out the industry’s political implications. His column Watching the World appears weekly in Oil & Gas Journal, while his news articles appear daily on Oil & Gas Journal Online. Eric’s work is based on his experience as a correspondent in the Middle East, Europe, and Central Asia. He lived in Saudi Arabia, 1981-88; Yemen, 1989-94; the UK, 1988-89 and 1994-2000; and Cyprus, 2000-04. Additional assignments have taken him to Africa, the Arabian Gulf, the Caucasus, and Central Asia.

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