Petrobras Plans 183 Projects Worth $68 Billion

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Researched by Industrial Info Resources (Sugar Land, Texas). Petrobras (NYSE:PBR), Brazil’s state-owned oil and fuel utility, has 183 of its strategic plan projects included in the Brazilian Growth Acceleration Plan (GAP), which was launched by the federal government on January 23, 2007. The projects represent a total investment of $68.7 billion in oil, gas and renewable fuel programs to be made by the company and its partners through 2010.

The investment total reflects outlays already included in the 2007–2011 business plan adjusted for revisions in costs of certain projects already approved by the board of directors. These revisions include the Rio de Janeiro State petrochemical complex (Comperj), the Abreu e Lima refinery in Pernambuco, the ethanol export pipelines and the Gas Production Anticipation Plan (Plangas). For related news item see September 4, 2006 – Petrobras to Invest $87.1 Billion by 2011 with 25% Up in Refining Capacity.

GAP’s goals mesh well with the Petrobras plan ensuring Brazil’s long-term oil self-sufficiency, with a minimum production 20% above the country’s internal consumption, with a minimum 15-year reserve/production ratio and heightened light oil production. The refining park will be boosted and modernized, increasing Brazilian oil participation in the processed load and bettering byproduct quality. Gas production will be accelerated and leadership in the biofuel area will be ensured.

In addition to several ongoing projects, other major downstream projects will be launched in 2007 including the Pernambuco refinery and the petrochemical complex in the state of Rio de Janeiro. The latter is the largest individual project ever carried out by Petrobras and private partners with a total planned investment of $8.4 billion ($3.28 billion up to 2010) and will have the capacity to process 150,000 barrels per day (bpd) of Brazilian heavy oil. The complex will consist of one basic petrochemical production unit (BPU) and six second generation petrochemical units. Comperj’s production will change the Brazilian petrochemical sector from a structural standpoint. Construction is expected to start in the fourth quarter of 2008, with operations staring in 2012. Main products will include diesel fuel, ethane, propene, benzene, paraxylene and butadiene in the first generation. The Rio project also includes the Sao Goncalo Intelligence Center, polypropylene, PET, PTA, ethylene glycol and styrene in the second phase.

The Abreu e Lima refinery has a design capacity to process 200,000 bpd of heavy oil and will be constructed in association with Venezuela’s state oil company, PDVSA. Civil/site preparation on the project will start in July 2007, and the plant is scheduled to go into operation in 2012. Total project investment will be $4 billion ($2.24 billion through 2010). The refinery will produce, in volume order, diesel fuel, coke, naphtha, LPG and bunker oil. Product will be aimed at the demand in the northeast of the country.

Projects to enhance and modernize Petrobras’ refineries will broaden the processed load by 100,000 bpd and raise the processed Brazilian oil volume to 250,000 bpd. The $9 billion investment will involve work in all the company’s refineries and is also aimed at improving fuel quality to make it ‘cleaner’, preventing emissions, which are estimated at 86,000 tons of SO2 per annum, thus improving quality of life in the cities.

The biodiesel production plan sees industrial units initially installed in Candelas, Monte Claros and Quixada, with the capacity to produce 50,000 tpa with operations to start in 2007. Total investment will be about $228 million. Petrobras is also analyzing the possibility of building other biodiesel plants in partnership with private companies at several sites in 2008. The envisaged capacity of 855,000 cubic meters of biodiesel production per annum by 2010 will allow 2.3 million equivalent tons of carbon emissions to be prevented.

Plangas aims to raise the natural gas production capacity in southeastern Brazil by 24 million cubic meters per day by late 2008 and by 39 million cubic meters per day by 2010, giving production totals of 40 million and 55 million cubic meters, respectively. The $10 billion investment over the period involves several projects and, among other benefits, will improve the national power system’s reliability by making natural gas available for thermal energy generation. Petrobras has a wide range pipeline and mainly gas-fed petrochemical projects underway or planned across the country

To keep increasing production in the long term, Petrobras has been enhancing its exploratory portfolio and currently has over a hundred blocks it has purchased from National Petroleum, Natural Gas and Biofuel Agency (NPA) auctions, in addition to several areas overseas, for future exploration. This allows the company to set a production goal of 4.556 million bpd by 2015. Meanwhile, for the latter portion of this decade, the company’s total oil and gas production will cap at 3.493 million bpd with 2.925 of the total resource lifted from Brazilian fields.

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