By ANNA EDGERTON and PETER MILLARD
Petroleo Brasileiro SA, or Petrobras, facing a growing
scandal over its $1.2 billion purchase of a refinery
in Texas, said it bought
the plant to maximize returns on heavy oil that it
couldnt refine in Brazil.
The Pasadena plant still had good margins in 2008 when
Petrobras began to negotiate increasing its stake, CEO Maria
das Gracas Foster told a Brazilian congressional commission
on Wednesday. The state-run company recognized a $530 million
loss from the deal, she said.
Opposition lawmakers are pushing for a formal investigation
into the 2006 purchase from Astra Oil Trading, which Foster
said paid at least $360 million for the plant.
President Dilma Rousseff, then Petrobras chairwoman,
said last month that directors approved the $370 million
purchase of a 50% stake without knowledge of a clause that
later forced it to buy the rest as part of a $820.5 million
Pasadena turned into a business that isnt good
for us after margins fell, Foster said.
The outcry over the acquisition is shining the spotlight on
Petrobrass runaway refining
investments and project
delays that contributed to
17.7 billion reais ($7.7 billion) in losses for the unit last
year. Petrobras, which loses money on fuel sales because of
government price caps, is working to make domestic and
foreign prices converge over time, Foster said.
Opposition members collected enough signatures this month to
create a separate commission to investigate the Pasadena
deal, prompting government-allied senators to propose a wider
commission to also look into project
s that affect the two main
The senate could decide to increase the scope and to include
representatives from the lower house.
The court that oversees government spending and the Public
Ministry is already investigating Petrobras for the purchase
of the refinery
. The state-run company
said its collaborating with government agencies and
created its own committee to investigate.