Petrobras Aims To Increase Brazil’s Oil Production by Building Two New Refineries by 2014

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Researched by Industrialinfo.com (Sugar Land, Texas). Petrobras, the Brazilian state owned oil company, is constantly taking steps towards reaching a goal of oil self-sufficiency. Just recently, Petrobras’ Supplies Director, Paulo Costa, announced new plans to build a refinery that could reach a production capacity of nearly 500,000 barrels per day and would start operations by 2014. This investment aims to increase the company's production capacity of heavy crude and to supply higher quality gasoline and diesel. Single-handedly, this project’s capacity is equal to 25% of the company's current domestic refining capacity. Considering the fact that Brazil has one of the largest sedimentary basins in the world (a total of 6.4 million square meters), of which only about 10% has been developed or explored, by 2010 91% of the oil refined in Brazil will be domestic, company officials announced.

Petrobras’ authorities claimed that Brazil needs a new refinery to supply the domestic demand which has been projected to grow at least 3.1%, as well as the need to keep pace with the international scenario in meeting the demands of the North American and European markets. Paulo Costa pointed out that the refinery, which will be called "Premium," will be the largest of its kind for Petrobras, exceeding the Replan refinery, which has a production capacity of 365,000 b/d in Sao Paulo, Brazil.

The Petrobras - PDVSA Partnership

In an attempt to further forge the economic ties between Brazil and Venezuela, the signing of an agreement by the Brazilian oil giant Petrobras and its Venezuelan counterpart PDVSA was reached last October 2005 for the construction of a refinery in Brazil. The funding will be equally divided between the two South American nations. According to a Petrobras spokesman, the construction of the new refinery will begin in 2007, although the plant will not be ready for operation until 2011. This $2.5 billion investment will be built in the southern coast of the state of Pernambuco, near Recife. The refinery’s location was strategically chosen due to its proximity to the great consumers, United States and Europe, since it is so close to the Atlantic Ocean. The refinery will have a production capacity of 200,000 barrels a day and will process crude oil which is extracted in both Brazil and Venezuela.

Brazil Intends To Become Self-Sufficient In Natural Gas

Petrobras is currently directing its efforts to increase its investments towards the expansion of domestic production of natural gas and thus reducing the country’s dependence on Bolivian gas after the nationalization of the gas industry in that country. According to Petrobras’ President, Jose Sergio Gabrielli, self-sufficiency in natural gas is a goal that must be achieved by 2008 or 2009. The company announced on July 26, 2006 that the steps to increasing production and reserves heavily involve offshore operations mainly in the Santos Basin located in the southeastern part of the Brazilian continental margin, one of the largest Brazilian sedimentary basins. According to Gabrielli, these five productive poles in the Santos Basin will be able to generate 30 million cubic meters of natural gas all the way to the year 2010.

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