Petrobras to open refining investment to private sector

Brazil is expected to attract new refineries through foreign investment by 2005, said David Zylberstajn, executive director of the National Petroleum Agency (ANP). The director said that this will happen after Petroleo Brasileiro SA (Petrobras) produces more than 2 million b/d of crude oil.


RIO DE JANEIRO´┐ŻBrazil is expected to attract new refineries through foreign investment by 2005, said David Zylberstajn, executive director of the National Petroleum Agency (ANP). The director said that this will happen after Petroleo Brasileiro SA (Petrobras) produces more than 2 million b/d of crude oil.

At present, Petrobras produces around 1.2 million b/d.

The easing of Petrobras' monopoly over most aspects of the oil industry in Brazil has taken place in the upstream sector. Petrobras owns 11 of the 13 refineries in Brazil, 2 refineries in Bolivia, 2 fertilizer factories, and an industrial module to process shale. In Brazil, Petrobras' refineries today process around 1.7 million b/d of crude oil.

The two private refineries in Brazil are very small, together processing about 30,000 b/d of oil.

The federal government is pressuring Petrobras to sign partnerships with the private sector in refining to diminish the company's hegemony in the refining sector.

"The multinational companies that find oil here will want to sell most of the oil products in Brazil, instead of exporting it, because the domestic market is rather promising and practices international prices," said the ANP director. He estimates installation of a refinery requires investments of $1 billion to $1.5 billion.

Most of Petrobras' refineries are being adapted to receive more heavy oil produced in Campos basin, offshore Rio de Janeiro state. Petrobras is working to diminish refining costs to $0.80/bbl by 2005 from the present $1.08/bbl.

Petrobras' strategic plan calls for an increase in refining capacity of 4%/year to meet estimated consumption of 2.2 million bbl in 2002. Investments for modernizing and expanding the refineries are estimated at $5.5 billion between 2000-2005.

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