By JENNY GROSS
BARCELONA -- A refining executive at Brazilian state-run
energy giant Petroleo Brasileiro, or Petrobras, said costs
associated with transporting oil products to hubs in Europe, the US and Asia make it less
practical than using production domestically.
Claudio Romeo Schlosser, Petrobras executive manager of refining, said on the sidelines of
the Global Refining Summit in Barcelona that
investing in Brazil is the best way to cash in on the country's
Petrobras plans to build five new refineries in the next few
years so it can meet Brazil's demand for oil products without
having to import large amounts of gasoline and diesel.
The company reported last week that its first-quarter net
profit declined 16% year-on-year.
Part of the reason Petrobras has seen its earnings fall in
recent quarters is because Brazil doesn't have enough refining
capacity, and it must import expensive gasoline and diesel fuel
to meet booming domestic demand.
The distance between the Brazilian coast and major refining centers is at least 5,000
miles, Schlosser said, which would take between 16 and 33 days
to ship product. Petrobras would focus on meeting the needs of
the domestic market, he said.
Underpinning growth in the Brazilian market is demand for
diesel and jet fuel, he said, adding that the company expects
strong growth for those products to continue.
More than half of Brazil's goods are transported by trucks
that use diesel, compared to much lower figures in countries
such as the US, he said.
When Brazilian refineries come online, exports from Brazil,
and Saudi Arabia and Russia, will help cushion diesel shortages
in Europe, according to the
International Energy Agency's most recent report on oil
Dow Jones Newswires
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