Pdvsa still looking to buy stakes in foreign refineries

Venezuela's state owned Petroleos de Venezuela SA (Pdvsa) continues to mull opportunities to invest in more refineries in the Americas. Industry sources in Caracas report the state oil company is serious about expanding its refining capacity domestically and abroad. High on the list of foreign refineries that have attracted Pdvsa's attention are refineries owned by Mobil Corp. at Chalmette, La.; Phibro Refining Inc. at Texas City, Tex.; and Phillips Petroleum Co. at Sweeny, Tex.

July 22, 1996

2 min read

Venezuela's state owned Petroleos de Venezuela SA (Pdvsa) continues to mull opportunities to invest in more refineries in the Americas.

Industry sources in Caracas report the state oil company is serious about expanding its refining capacity domestically and abroad.

Investment targets?

High on the list of foreign refineries that have attracted Pdvsa's attention are refineries owned by Mobil Corp. at Chalmette, La.; Phibro Refining Inc. at Texas City, Tex.; and Phillips Petroleum Co. at Sweeny, Tex.

All are reported targets for investment because they are capable of processing Venezuela's heavy and extra heavy crudes.

In addition, Pdvsa is negotiating with Brazilian state oil company Petroleos Brasileiro the possible construction of a grassroots refinery in northern Brazil. That refinery would be designed with capacity to process 100,000 b/d of Venezuelan heavy crude and another 100,000 b/d of crude from other countries.

A group of five Japanese companies led by Mitsubishi Corp. reportedly has expressed interest in participating in the $2 billion Pdvsa-Petrobas joint venture refinery.

Pdvsa operating unit Maraven SA recently failed in a bid to purchase Peru's La Pampilla refinery, offered in a public tender as part of a privatization scheme.

Rationale, status update

A Pdvsa official in Caracas said, "Now is a good time to purchase a refinery, and almost on a daily basis we have meetings with those interested in selling."

Pdvsa's 1996-2006 business plan provides for purchasing interests in at least two refineries abroad to hike its processing capacity by about 250,000 b/d.

The state company currently owns wholly or partially about 14 refineries worldwide, giving it a total processing capacity of about 1.246 million b/d.

The Pdvsa official said negotiations regarding the possible purchase of an interest of Cuba's 150,000 b/d Cienfuegos refinery have been placed on hold. Pdvsa was offered a 50% stake in the northern Cuba refinery after Mexican state oil company Petroleos Mexicanos declined to purchase an interest in the refinery last year.

Industry sources say negotiations for possible purchase of a 50% interest in Mobil's 170,000 b/d Chalmette refinery "are well advanced." Those negotiations form part of a deal being worked out between Pdvsa unit Lagoven SA and Mobil that includes a $1.8 billion joint venture to produce and upgrade 100,000 b/d of heavy crude from Venezuela's Orinoco oil belt that would be then processed at the Chalmette refinery.