Recife – Petrobras has the resources to complete the refinery being built in northeast Brazil with partner PDVSA alone if the Venezuelan state-owned oil giant decides to pull out of the project, company executives said.
"The project is not going to be halted and there is not going to be a shortage of resources to complete it if PDVSA leaves the partnership," Petrobras director of downstream operations Paulo Roberto Costa said in a press conference at the headquarters of the Abreu e Lima binational refinery project.
Petrobras commenced the refinery's construction at the port of Suape, located a few kilometers from Recife, the capital of Pernambuco state, without any assistance from the Venezuelan oil company, Costa said.
"About 35 percent of the project has been executed and the refinery is expected to start production in 2013," the Petrobras executive said.
The refinery will have the capacity to process 230,000 barrels per day (bpd) of petroleum.
Petroleos de Venezuela, or PDVSA, has until August to decide whether it wants to continue the partnership because the funding provided by Petrobras ends this month, Costa said.
Construction of the $16.25 billion refinery was started with a $6.25 billion loan that Petrobras obtained from the state-owned BNDES development bank, Costa said.
"As of now, we have used nearly 7 billion reais (about $4.38 billion) of this loan and, since all the work was already contracted for, the funds run out in August," the Petrobras executive said.
"August is the deadline that PDVSA has to decide if it wants to contribute its share, which is 40 percent of the refinery, and whether it is going to continue providing resources so we can move ahead with the construction," Costa said.
"We have set aside some resources so we can continue the project without stopping the work in case we have to take over 100 percent of the refinery," the Petrobras executive said.
Negotiations on the refinery project dragged on for several years due to differences over what each party's final stake would be, and Petrobras decided to start construction on its own due to PDVSA's failure to assume its share of the BNDES loan.
"Today, the refinery is 100 percent Petrobras's. There is nothing new in terms of what PDVSA's position is or any signs of whether the BNDES accepted the guarantees of the Venezuelan company. I can't say that PDVSA is out, but I also can't say that it's in," Costa said.