PDVSA, Petrobras finalize Brazil refinery deal
By Artur em 02/11/2009 :: Talk wiht us
Brazil and Venezuela finalized a deal to jointly build and operate an oil refinery in Brazil on Friday as the nations' leaders signed 15 agreements pledging cooperation in agriculture, energy and technology.
Petroleo Brasileiro SA ( PBR - news - people ) will hold a 60 percent stake in the new refinery company, and Petroleos de Venezuela SA will control the rest, according to a statement from Petrobras, as the Brazilian state-run company is known.
The agreements were signed after presidents Hugo Chavez of Venezuela and Luiz Inacio Lula da Silva of Brazil rode a tractor together at a soybean farm, pledging to boost trade, which totaled $5.7 billion last year.
Silva called the agreements a powerful example of South American integration. He said the two countries and South America as a whole are becoming liberated "from our own blindness; We've spent a lot of time without seeing each other, without discovering our potential in politics, culture, and trade."
Chavez and Silva signed the accords in the eastern town of El Tigre, including the agreement for the Abreu e Lima refinery in northeastern Pernambuco state.
The two nations have been working since 2005 to finalize the deal; one stumbling block had been a disagreement over the price of Venezuelan oil to supply the refinery. Last year, Petrobras began building the refinery without Venezuela's help.
The refinery will be capable of processing 230,000 barrels of heavy crude per day and will mainly produce diesel. Petrobras says each company is to supply equal amounts of crude to the refinery, which is projected to cost $12 billion, up from an initial estimate of $4 billion.
Silva stressed the importance of reducing a nation's dependence on oil - likening crude production to "playing in a casino."
"One wants to win more and all of a sudden, one loses everything," Silva said, adding that he's "very pleased" because Venezuela is diversifying by producing corn, soy and other agricultural goods.
Venezuela's economy remains dominated by oil, and the country imports most of its food.
Venezuela is borrowing to finance at least some of the refinery deal. Last month, Oil Minister Rafael Ramirez said Venezuela will obtain financing for its $300 million down payment from a Brazilian bank.
The refinery deal has been a key political project as Chavez and Silva have sought to deepen energy integration in South America. Another project, a natural gas pipeline stretching across South America that Venezuela proposed in 2006, has failed to take shape.
Source: Forbes
www.forbes.
Petroleo Brasileiro SA ( PBR - news - people ) will hold a 60 percent stake in the new refinery company, and Petroleos de Venezuela SA will control the rest, according to a statement from Petrobras, as the Brazilian state-run company is known.
The agreements were signed after presidents Hugo Chavez of Venezuela and Luiz Inacio Lula da Silva of Brazil rode a tractor together at a soybean farm, pledging to boost trade, which totaled $5.7 billion last year.
Silva called the agreements a powerful example of South American integration. He said the two countries and South America as a whole are becoming liberated "from our own blindness; We've spent a lot of time without seeing each other, without discovering our potential in politics, culture, and trade."
Chavez and Silva signed the accords in the eastern town of El Tigre, including the agreement for the Abreu e Lima refinery in northeastern Pernambuco state.
The two nations have been working since 2005 to finalize the deal; one stumbling block had been a disagreement over the price of Venezuelan oil to supply the refinery. Last year, Petrobras began building the refinery without Venezuela's help.
The refinery will be capable of processing 230,000 barrels of heavy crude per day and will mainly produce diesel. Petrobras says each company is to supply equal amounts of crude to the refinery, which is projected to cost $12 billion, up from an initial estimate of $4 billion.
Silva stressed the importance of reducing a nation's dependence on oil - likening crude production to "playing in a casino."
"One wants to win more and all of a sudden, one loses everything," Silva said, adding that he's "very pleased" because Venezuela is diversifying by producing corn, soy and other agricultural goods.
Venezuela's economy remains dominated by oil, and the country imports most of its food.
Venezuela is borrowing to finance at least some of the refinery deal. Last month, Oil Minister Rafael Ramirez said Venezuela will obtain financing for its $300 million down payment from a Brazilian bank.
The refinery deal has been a key political project as Chavez and Silva have sought to deepen energy integration in South America. Another project, a natural gas pipeline stretching across South America that Venezuela proposed in 2006, has failed to take shape.
Source: Forbes
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