Petrobras eyes U.S. market with PDVSA refinery plan
Thu Aug 25, 2005 07:11 PM ET
NEW YORK, Aug 25 (Reuters) - Brazil's Petroleo Brasileiro SA (Petrobras) is looking to export fuel to the United States and other markets through a proposed refining joint venture in Brazil with Venezuelan state oil giant PDVSA, Petrobras President Jose Gabrielli said in an interview on Thursday.
The proposed 200,000 barrel per day refinery in Brazil's northeast state of Pernambuco would "be a good strategic position for exports the United States, the Caribbean and to Europe," the Petrobras president said.
Northeast Brazil is relatively undeveloped compared to the more industrialized southeast and a weak spot in the Brazilian market, Gabrielli said.
PDVSA and Petrobras signed a memorandum of understanding in February to complete feasibility studies for the construction of the plant.
The refinery is part of an effort by Venezuelan President Hugo Chavez to increase energy ties in the region.
"We think that soon we are going to reach a conclusion together with PDVSA. The idea is to have a partner in the refining business in Brazil and PDVSA is probably the partner," said Gabrielli.
Venezuela has proposed to use crude from a planned PDVSA-Petrobras joint venture in the OPEC nation's Orinoco extra heavy oil region to feed the refinery.
Brazilian officials have said they want the projected plant to process Venezuelan crude as well.
Venezuela, the world's No. 5 oil exporter, is looking to Brazil and other Latin American nations to diversify its oil exports. The South American nation sells most of its crude and products to the United States, but Chavez has made expansion into new markets a cornerstone of his oil policy.
The left-wing leader is a harsh critic of U.S. President George W. Bush, but officials say Venezuela will remain a secure supplier of oil to the giant U.S. market and was only looking to new markets for oil production it plans to bring online in the future.
Chavez has proposed the creation of various regional energy organizations, including Petroamericas for South America and Petrosur for the Southern Cone, to help promote energy cooperation between nations.
Gabrielli said that while he did not expect a "unique company" to serve the region, he does see a trend toward more regional cooperation.
"We do see a tendency toward integration of the markets of oil products, natural gas and energy in South America," he said.
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