INTERVIEW: Petrobras delays startup of Abreu e Lima refinery to 2014: CFO

Tokyo (Platts)--16Oct2012/721 am EDT/1121 GMT


Brazil's Petrobras expects to start up the 230,000 b/d Abreu e Lima refinery in Pernambuco state in 2014, with "60% of the refinery has already been built," company chief financial officer Almir Barbassa told Platts Monday. The company had previously said it expected to launch the plant in mid-2013.

This will be the first of four new refineries being built by Petrobras in Brazil to add a combined capacity of 1.46 million b/d by 2020, in a bid to meet the country's growing demand for middle distillates, Barbassa said in an interview in Tokyo.

Barbassa said Petrobras was also in negotiations with Venezuelan state-owned oil company PDVSA over building the Abreu e Lima plant, although he declined to elaborate when asked about PDVSA's participation in the project.

Petrobras' top refining official, Claudio Romeo Schlosser, said in May that PDVSA had until December to participate in the refinery project, but added that the plant would still come on stream in mid-2013 even without Venezuela's participation.

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Venezuelan President Hugo Chavez and former Brazilian President Ignacio Lula agreed in 2005 to share the refinery's costs, and a deal was signed in 2008. But PDVSA has yet to pay anything and Brazil has given Venezuela a number of extensions on the deal to allow Caracas time to secure loan guarantees for its 40% stake in the joint venture.

However, in recent years, doubts have been cast about PDVSA's commitment to the project, which has an overall price tag of about $15 billion and would have half of its 230,000 b/d capacity dedicated to refining heavy Venezuelan crudes.

By 2016, Barbassa said Petrobras plans to bring online the first of the two phases at the Comperj refinery in Rio de Janeiro state, with a capacity of 165,000 b/d. The company plans to process Brazilian heavy crude grades at the two facilities.

In its 2012-2016 investment plan, Petrobras earmarked total investment of $71.6 billion in its downstream sector, focusing on modernizing and expanding its refining facilities.

Of the total downstream capex, $55.8 billion has already been approved for implementation, and $15.8 billion is yet to be approved and under evaluation.

CAPACITY HIKE

At present, Petrobras is processing about 2.08 million b/d of crude through its refineries, out of a total capacity of around 2.10 million b/d, Barbassa said.

He added that Petrobras' refining capacity has risen from 1.8 million b/d in 2010 after units were added at some of its refineries in the country.

With Brazilian domestic product demand of around 2.20 million b/d, Petrobras currently imports diesel and jet fuel to cover the gap, Barbassa said.

Looking ahead, Petrobras plans to start up the second phase of the Comperj refinery with an additional capacity of 165,000 b/d, as well as the 600,000 b/d Premium I refinery in Maranhao state -- in two phases of 300,000 b/d each -- and the Premium II refinery in Ceara state by 2020, Barbassa added.

Unlike its planned processing of heavier crudes at the Abreu e Lima refinery and the first phase of the Comperj facility, Petrobras plans to process lighter grades from its pre-salt reservoirs at the second phase of Comperj, and at the Premium I and Premium II refineries, Barbassa said.

These new refineries will be designed to focus on producing middle distillates, which will account for 70% of total output, Barbassa said.

"We are not looking for gasoline because we have ethanol and have other refineries that can produce gasoline," he said.

Barbassa added, however, that for these other refineries -- which are scheduled to come on stream by 2020 -- Petrobras still needs to complete appraisal and evaluation before moving ahead.

"They have to be proved to give returns we are looking for," Barbassa said. "We are looking for having best international costs for building these refineries. We can consider partners."

South Korean refiner GS Caltex has entered talks with Petrobras about the possibility of participating in the 300,000 b/d Premium II refinery in Ceara state. Barbassa described the talks as "just discussions."

"Nothing has been signed and agreed so far," he added.

--Takeo Kumagai, takeo_kumagai@platts.com
--Edited by James Leech, james_leech@platts.com




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