Venezuela, Brazil sign accord on Abreu e Lima refinery

Brazil’s state-run Petroleo Brazileiro SA (Petrobras) and Venezuela’s Petroleos de Venezuela SA (PDVSA) completed negotiations for joint construction and operation of the Abreu e Lima refinery, in Brazil's Pernambuco state.

Nov 3rd, 2009

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Nov. 3 -- Brazil’s state-run Petroleo Brazileiro SA (Petrobras) and Venezuela’s Petroleos de Venezuela SA (PDVSA) completed negotiations for joint construction and operation of the Abreu e Lima refinery, in Brazil's Pernambuco state.

The two firms said the Abreu e Lima refinery will be able to process 230,000 b/d of heavy oil, supplied equally by Petrobras and PDVSA. The refinery’s main product will be low-sulfur diesel.

Petrobras and PDVSA will incorporate the company in Brazil. They did not say when the procedures would be completed or when the refinery would begin operating.

The refinery was conceived to process crude from a PDVSA-Petrobras joint venture in the Carabobo region of Venezuela's Orinoco belt, but it has taken years for the two sides to agree on the terms of their partnership.

Last month, Petrobras said it had resolved all outstanding issues with PDVSA over development of the Abreu e Lima refinery, but that the Venezuelan firm would have to pay Petrobras at least $400 million when it signs the final agreement (OGJ Online, Oct. 8, 2009)

Petrobras will hold a 60% stake in the joint-venture firm, while PDVSA will hold the remaining 40%.

Contact Eric Watkins at hippalus@yahoo.com.

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