Japanese Banks Finance Brazil’s Petrobras Expansion

Petrobras, the Brazilian oil giant, and a consortium of international banks signed yesterday, May 23, in the United States, contracts for investments worth US$ 900 million for the construction of new refining units in Brazil.

The units will be connected to Refinery Henrique Lage (Revap), the fourth largest refining unit in the country, located in São José dos Campos, 90 kilometers away from the city of São Paulo, in the southeast of Brazil.

The beginning of construction works is due in the second quarter of 2006, and the new units should start operations in the first quarter of 2009.

The initiative is part of the policy adopted by the state-owned company, of directing investments to expand and modernize the refining capacity of national oil.

In a statement, Petrobras informed that the expectation is that the project should generate about 26,000 direct and indirect jobs during the construction phase.

"The objective of the undertaking is to increase the capacity for conversion of fuel oil into lighter oil products, to adjust the diesel oil produced to the new national specifications, to start the refinery’s sales of coke (a solid product that remains after the break-up of the molecules of petroleum) and to reduce the emission of pollutants," according to the statement.

The main financer of the enterprise will be Japan Bank for International Cooperation, responsible for 54% of the line of credit granted (US$ 486 million).

The pool also includes a union of retail banks including, among others, Santander-Banespa (to grant US$ 378 million), Bank of Tokyo Mitsubishi and Sumitomo; as well as a Japanese trading consortium – to grant another US$ 36 million.

ABr

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