Petrobras open to restoring PdVSA refinery plan


RIO DE JANEIRO -- Petrobras still wants Petroleos de Venezuela (PdVSA), to participate in a joint venture refinery project, CEO Maria das Gracas told the Valor Economico newspaper in an interview.

PdVSA is welcome at the Abreu e Lima refinery project under the planned JV model, Ms. Foster told Valor. But, the executive added, PdVSA must first cut a check for about $6.8 billion to cover the firm's 40% stake in the $17 billion project. An alternative solution would be to pay in oil, but Ms. Foster told Valor that the payment could not be made in "drops."

"I need money," Ms. Foster told Valor, citing the company's $237 billion investment plan through 2017.

Petrobras has been building the refinery, which is 80% complete, on its own after PdVSA repeatedly missed deadlines to provide cash and loan guarantees to cover the Venezuelan company's part of construction costs. Valor reported that Petrobras planned to pull the plug on the joint venture on November 1, 2013.

An adjustment to domestic gasoline and diesel prices also will not be made in the near term, Ms. Foster told Valor. Brazil's domestic fuel prices are less than international benchmarks, causing the company to sell imported fuels at a loss in the local market.

"In order to calmly undertake our investment plans, it's necessary that we seek convergence between domestic and international fuel prices," Ms. Foster told Valor.

Petrobras expects to end 2013 with crude oil output of about 2 MMbpd but the nine new production platforms installed this year will mean a jump in output in 2014, Ms. Foster told Valor. "By the end of this year, we'll already be increasing production and 2014 will be the turning point," Ms. Foster told Valor.

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