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Brazil Begins Work on Refinery

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This topic contains 1 reply, has 2 voices, and was last updated by  Charles Randall 15 years, 5 months ago.

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  • #3953


    Tuesday September 4, 2007   By Vivian Sequera, Associated Press Writer
    Brazil’s Petrobras Starts Work on New Refinery Without Venezuela’s PdVSA

    BRASILIA, Brazil (AP) — Brazil’s state-run oil company began construction Tuesday of a heavy oil refinery in northeastern Brazil, but without the planned participation of Venezuela’s state-run oil company.
    Petroleos de Venezuela SA, or PdVSA, was originally supposed to have a 40 percent stake in the $4.05 billion refinery, with Brazil’s Petrobras holding the remaining 60 percent.  But talks with PdVSA bogged down, and Petroleo Brasileiro SA began to bulldoze the refinery area without its Venezuelan partner.
    Brazilian President Luiz Inacio Lula da Silva, who donned a construction helmet and rode a tractor at the opening, said in a speech that Brazilian officials had delayed the project to ensure environmental and anti-corruption rules were met.
    But Petrobras Chief Executive Sergio Gabrielli told the Agencia Estado news agency that they couldn’t afford to hold back the project further for negotiations with the Venezuelan company. Gabrielli said the Brazilian company will build the 200,000-barrel-a-day refinery alone if PdVSA backs out, though he did not say that had happened.
    In December 2005, Silva and Venezuelan President Hugo Chavez laid the cornerstone of the Abreu e Lima refinery in northeastern Brazil, and the two oil companies announced a partnership.  About six weeks ago, Petrobras sent a proposed shareholders agreement to PdVSA, but PdVSA hasn’t responded, a Petrobras press official said last week.
    The refinery is scheduled to start operation in 2010. The project had been tied to the joint development of an extra-heavy oil field in Venezuela’s Orinoco Basin. Oil from the Carabobo I field is supposed to supply half of the crude for the Abreu e Lima refinery.
    But Petrobras and PdVSA haven’t finished a development plan for Carabobo and Petrobras hasn’t signed a deal that would commit it to the project.
    The Pernambuco refinery will mainly produce diesel fuel, Petrobras said. It is expected to produce 8.8 million tons of diesel per year, as well as 814,000 cubic meters of naphtha, 322,000 tons of cooking gas and 1.4 million tons of coke.
    The refinery will be the first to process 100 percent heavy crude, which is abundant in Brazilian offshore fields and in Venezuela, both on land and offshore. Refining more Brazilian heavy oil will reduce the country’s need to import light oil to produce quality fuels.

  • #7298

    Charles Randall

    Here is update on the Brazil Upgrader and it looks like Brazil intends to make the 2010 target startup date on Grassroots Refinery (& Coker) portion of the the proposed PDVSA/Petrobras Upgrading Joint Venture. Half of the heavy oil was always going to come from the Brazil offshore heavy oil fields and the other half was to come from PDVSA Venezuelan Orinoco Basin – Carabobo I field (Upgrader).
    PDVSA hasn’t been eliminated – but sounds like the corruption aspects, endless negotiating with government bureaucrats and lack of commitment has definitely taken off some of the appeal for Petrobras. 
    Petrobras has a long term series of refining projects to add additional coking capacity to nearly all of the Brazilian refineries and has completed/or is construction on more than half of them <Replan, Refap, & Reduc with Repar, Regar & Relam refineries in late planning/early EPC stages). And with the need for additional diesel/distillate (Brazil is distillate economy – not gasoline economy) and its own offshore heavy oil fields – it appears to have decided not to wait on the PDVSA process to set the pace.
    Petrobras also bought the Crown Houston/Pasadena Refinery in the US which it is converting to run the Brazilian offshore heavy oil crude (will need additional coking capacity) as well.
    Charlie Randall
    Independent Carbon & Coke Consultant

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