Manguinhos Refinery in Brazil to be Reactivated

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Researched by Industrial Info Resources (Sugar Land, Texas). Manguinhos refinery (Rio de Janeiro, Brazil) will restart operations in the following months. Manguinhos has been mothballed since August 2005 when activities were halted due to poor economics. The Brazilian state-owned Petrobras, which owns 98% of the Brazilian refining market, apparently did not raise prices at the time the international market did; as a result, the private companies at that time, Manguinhos and Ipiranga, were obliged to keep prices low so as to prevent the companies from losing the market.

Manguinhos is now the only private refinery in Brazil since Ipiranga, which has a petroleum refinery and the second biggest fuel distribution network in the country with 4,240 gas stations, has been acquired by Petrobras (NYSE:PBR), Braskem (NYSE:BAK) and Ultrapar for $4 billion. For details view related April 3, 2007, news article Petrobras, Braskem and Ultrapar Acquire Ipiranga, Brazil’s Second Largest Refining Company.

Manguinhos refinery has a processing capacity of 15,000 barrels of oil per day and is controlled by Spanish oil company Repsol YPF and by the Brazilian group Peixoto de Castro. The refinery mainly produces gasoline and solvents. Authorities announced that after 60 days of work, the refinery will start producing 11 cubic meters of gasoline per day from petrochemical naphtha instead of crude oil. One of the units will be adapted to process naphtha instead of crude oil.

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