March 14, 2010 at 2:28 pm #2742
Petrobras Told to Pay $639 Million Over Refinery (Update2)
By Laurel Brubaker Calkins
March 12, 2010 (Bloomberg) — Petrobras America Inc., a unit of Brazils state-owned oil company, was ordered by a U.S. judge to pay Astra Oil Trading NV and affiliates $639 million in a Texas refinery dispute.
U.S. District Judge Ewing Werlein, in a ruling dated March 10, upheld Astras victory last year in an arbitration proceeding. Astra said Petrobras wouldnt pay after Astra turned over its 50 percent stake in a refinery the companies co-owned in Pasadena, Texas.
Petrobras refused to recognize Astras attempts to exercise their put rights, Werlein said in the ruling in Houston. Arbitrators had ordered Petrobras to pay $639 million plus interest.
The refinery, Pasadena Refining System Inc., is on the Houston Ship Channel and has a capacity of 100,000 barrels a day, according to data compiled by Bloomberg. Petrobras agreed to buy Astras stake in February 2006 for about $370 million, Terry Hammer, Astras chief operating officer, said in an October 2008 interview.
Astra would certainly like it if the check was in the mail, Beth Bivans, Astras lawyer, said in a phone interview today. We hope this is the end, but our expectation is well hear more from Petrobras.
Petrobras America still can appeal the award, Bivans said. Lilian Laranja, a spokeswoman for parent company Petroleo Brasileiro SA in Rio de Janeiro, said she had no immediate comment on the decision.
The partners disagreed about their strategic vision for the refinery and PRSI Trading Co., a joint venture that supplied the plants feedstocks, according to court papers. Astra turned its stake over to Petrobras last April and arbitrated the dispute at the International Centre for Dispute Resolution.
Petrobras Americas chief executive officer, Orlando Azevedo, said on March 9 that the company plans to upgrade its Texas refinery, with work scheduled for completion in 2014. Previously, the company had deferred maintenance on the refinerys fluid catalytic cracker, which boosts output of more- profitable lighter refined products, until 2011.
The case is Astra Oil Trading NV v. Petrobras America Inc., 4:09-cv-01274, U.S. District Court, Southern District of Texas (Houston).
To contact the reporter on this story: Laurel Brubaker Calkins at email@example.com. Last Updated: March 12, 2010 15:32 EST
March 14, 2010 at 2:35 pm #5727
Here is update on sale (?) Pasadena Refinery to Petrobras – Texas Judge ordered Petrobras to pay Astra. <Since $370MM was what 50% stake was announced to be in Feb 2006 release (see News Post coking.com on 2/3/06 & 2/9/06) – I an not sure if $639MM was total value plant or if the other $299MM was for crude & product inventory at time sale.>
If Petrobras now have to actually “Pay” for the other 50% Refinery; it might shift timeline on the announced (Mar 9, 2010) upgrade plans which was to complete by 2014 (previous work on FCC had been shifted to 2011 – probably to integrate with this upgrading).
Really nice for change to see States/Texas legal system supporting US Refining Industry versus US/Fed System that lets foreign countries like Venezuela steal US Refining Industry without a word or judgement against them.
March 26, 2010 at 12:28 am #5708
RE: Petrobras total $639MM – a friend reminded me that this total includes first 50% of Pasadena Refinery $370MM when Petrobras bought into the refinery AND the second 50% of Pasadena when Petrobras bought them out to follow its path for expansion. I thought they had already paid for buy-in portion but guess not.
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