By JEFF FICK
RIO DE JANEIRO -- Brazilian state-run energy giant Petroleo Brasileiro, or Petrobras, said late Tuesday that it had been notified of a court order suspending environmental licenses for its Comperj refinery project in Rio de Janeiro state.
The order implied "an immediate work stoppage," Petrobras said. No further details about the order suspending the environmental licenses were available, according to a Petrobras spokesman.
Petrobras said that it was evaluating all possible measures related to the halt, which would stop work on one of the company's largest projects.
The Comperj refinery will have installed capacity to process 165,000 bpd of crude oil when it enters operation in April 2015, according to the company. A second phase, expected to be completed by 2018, would double capacity.
When completed, the refinery would ease Petrobras's dependence on expensive fuel imports that have undercut the company's profits over the past two years. Petrobras's refineries are operating at 98% capacity and unable to meet growing demand for gasoline and diesel fuel in Latin America's largest economy, forcing the company to import gasoline and diesel to meet demand.
But the company currently sells the imported fuels at a discount in the domestic market because of a controversial pricing policy that doesn't pass along international volatility to consumers at the pump.
Despite a 22% increase in diesel prices and 15% increase in gasoline prices over the past year, local prices remain below international market levels. Petrobras CEO Maria das Gracas Foster has said she is pursuing parity with international prices, but Brazil's government -- and the company's controlling shareholder -- has been reluctant to raise fuel prices for fear of stoking inflation.
Dow Jones Newswires