November 8, 2008 at 1:20 pm #3326
Petrobras in talks with Sinopec for refinery stake
Reuters – Friday, November 7
BEIJING, Nov 7, 2008 – Petrobras is in talks with top Asian oil refiner Sinopec on taking a refinery stake in China, but there have been no concrete developments yet as companies face higher costs, the chief of Brazil’s state-owned energy firm said on Friday.
“We are discussing new possibilities with Sinopec,” Jose Sergio Gabrielli told reporters in Beijing, where he was attending a global forum for national oil company executives.
Asked whether he would be interested in following other national oil companies in taking a refinery stake with Sinopec in China, he replied: “We have some discussions on that, but we don’t have any concrete movements right now.”
The marginal cost of expansion is around $60 per barrel, Gabrielli, the chief executive of Petroleo Brasiliero SA said, as oil prices fell below $60 a barrel for the first time in 1-? years on Friday.
“The marginal cost of expansion is probably today around $60,” he said.
“At the end of the day you would say that the main challenge that we have is the speed of adjustment of costs compared to the speed of adjustment of the price.”
Global oil prices have plunged almost $86 a barrel from their record high above $147 in mid-July.
Gabrielli said that in the long run companies must face the costs of the additional barrel and the new barrel costs more than the old one.
“If you have a very low cost in the short run, then you reduce investments and as such we have an upswing in price in the mid term,” he said.
“There is no doubt that the financial crisis affects the supply chain of the industry and also would affect the revenues of the most export-oriented companies, less those that are aiming more at domestic markets.” (Reporting by Emma Graham-Harrison; Editing by Ramthan Hussain and Ben Tan)
November 8, 2008 at 1:26 pm #6464
Here is update on Petrobras looking for interest in Sinopec Refineries. I wonder if Petrobras realizes that Sinopec had to be bailed out by the Government the last 5 years to keep from going under because the imposed fuel price $0.90/gal creates a loss when crude is at $60-100/bbl??
<Doesn’t make sense to me this is place to make a refinery investment compared to developed western countries refineries. Eventually China is going to be held accountable for lack environmental oversight & unfair subsidized oil prices – really should have already lost its WTO status considering its bad health track record on drugs/foods/toys …..US gets 1 bad cow Canada & its out Meat industry for 3 years hard to see equality here.>
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