Petrobras to Cost $4.3 bln to Finish Comperj Refinery

Source: Reuters 8/27/2015, Location: South America

Brazil's state-run oil company Petroleo Brasileiro SA would cost an additional $4.3 billion to complete the first 165,000 barrel-a-day operating unit at its stalled Comperj refinery project outside Rio de Janeiro.

Petrobras, as the company is known, expects to complete the first unit or "train" at the plant in Itaborai, Brazil in 2020, its refining chief Jorge Celestino Ramos said during hearings at the Rio de Janeiro-state legislature. The work could be finished sooner if Petrobras can find a partner to help complete the refinery, Ramos added.

The refinery, located in Itaborai, Brazil is more than 80 percent complete. It was supposed to enter operation in August 2016, according to the Petrobras website.

With Petrobras already having spent $11 billion on the first unit, the cost of completion will rise to $15.3 billion, according to information provided by Petrobras at the hearing.

At an estimated cost of about $93,000 for each barrel of refining capacity added, Comperj will be one of the most expensive oil refineries ever built.

Petrobras virtually halted all work at Comperj in late 2014 as an expanding corruption scandal raised concern about overspending and bribery in refining projects and several contractors involved in the project went bankrupt.

Petrobras has also scaled back spending as falling oil prices and the fallout from the corruption scandal pressured executives to try and cut its $132 billion of debt, the largest of any oil company in the world.

Petrobras' senior executive in charge of engineering, Roberto Moro, played down the impact of lower oil prices on the company. He said Petrobras' production costs at as little as $14 a barrel meant many other oil companies would go bankrupt before Petrobras ran into difficulty.


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