PDVSA poised to enter Brazil's oil products distribution market

Petroleos de Venezuela SA (PDVSA) has requested permission from Brazil's National Petroleum Agency (ANP) to become a distributor of oil products in Brazil, said Andres Riera, a PDVSA director.

Aug 2nd, 2002

By an OGJ correspondent

Rio de Janeiro, Aug. 2 -- Petroleos de Venezuela SA (PDVSA) has requested permission from Brazil's National Petroleum Agency (ANP) to become a distributor of oil products in Brazil, said Andres Riera, a PDVSA director.

PDVSA wants to become a distributor in Brazil through its subsidiary Citgo Latin America (Cilo), said the director. The target of the Venezuelan company is to begin distribution in the northern and northeastern regions of Brazil under the brand PDV do Brasil SA, he added.

According to PDVSA's general manager in Brazil, Renata Campagnaro, the first service station will be inaugurated by yearend 2002. PDVSA has already purchased a distribution unit from the Brazilian company Equatorial in the city of Porto Velho, Rondonia state, and is negotiating the purchase of more service stations and warehousing space.

Campagnaro said that PDVSA's debut in Brazil may take place through the purchase of assets of other companies or by buying "white flag" service stations (which have no trademark.) Market analysts say PDVSA is aiming at buying 300 service stations within 2 years.

With the arrival of the Venezuelan company, Petroleo Brasileiro SA (Petrobras) will face tough competition from PDVSA in Rondonia, Amazonas, Para, and Roraima states, which are traditional importers of oil products from southern Brazil mostly through Petrobras, which dominates the distribution market. PDVSA is Latin America's largest crude oil producer.

Through its subsidiary Citgo, PDVSA is one of the largest distributors in the US, where it also owns refineries that are geared to process heavy crude oil. Director Riera also said that soon PDVSA will purchase a lubricants factory in Brazil with and place it under PDV trademark.

During the 1990s, the rate of Brazil's growth in demand for oil products was one of the greatest in the world, lagging only those of China and India.

"PDVSA is interested in increasing its presence in Brazil's distribution market because studies show that there will be a deficit in oil products in Brazil during this decade," concluded the director.

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