A New Petrobras
A New Petrobras
Reprinted with kind permission from Petrobras Magazine.
Petrobras Downstream director Paulo Roberto Costa explains how the company is going to increase its refi ning capacity to process the oil extracted from the pre-salt province and strengthen its activities in the Petrochemicals area to go from being an importer to being an exporter of oil and oil products.
As the Petrobras Downstream director, the engineer Paulo Roberto Costa is leading processes that are going to alter the profi le of the company considerably. Among them, there is the enlargement of the Petrobras refi ning park because of the company's increase in oil production, especially due to the beginning of production in the pre-salt area. Also, there is the expansion of basic petrochemicals production and operations in the second generation, in synergy with other businesses in the Petrobras System. To achieve these aims, fi ve new refi neries will enter into operation by 2015, and Petrobras will strengthen its presence in the Petrochemicals area, increasing its competitiveness in Brazil and abroad.
Brazil Oil and Gas: What is the present volume of oil refi ned by Petrobras relative to that produced?
Paulo Roberto Costa: Th e peak of Petrobras' refi ning capacity is around 1.9 million barrels of oil per day, considering that all the refi neries are operating at maximum potential. However, as there are shutdowns, planned or not, the average is 1.8 million barrels per day. Th e Petrobras production is two million barrels per day in Brazil. Th e demand from the Brazilian market including diesel, gasoline, liquefi ed petroleum gas (LPG), jet fuel, naphtha, coke, and bunker, has been 1.8 million, a quantity that decreased by 1.2% from 2008 to 2009, due to the world economic crisis. Th e excess of oil is exported. Our refi ning capacity is therefore very close to the demand and is below production. Considering the expectation for growth in the Brazilian GDP of around 4.5% in the coming years, which will generate higher consumption of oil products, and the estimation of total Petrobras production at 3.5 million barrels of oil equivalent per day in 2015 and 5.7 million in 2020, due to the production from the fi elds in the pre-salt area, it will be necessary to increase our refi ning capacity. It would not be interesting for our balance of payments to export oil, with lower added value, because we could not process it here, and import oil products that are more expensive. We therefore decided to expand our refi ning capacity by 1.2 million barrels per day by 2015. In this way, we will be able to serve the Brazilian market. We are also aiming at the external market, through the exportation of excellent quality diesel and oil products produced in the Abreu e Lima, Premium I, and Premium II refi neries.
Brazil Oil and Gas: Th e Abreu e Lima Refi nery will begin operations in 2012. What will its role be?
Paulo Roberto Costa: Th e Abreu e Lima Refi nery, which is under construction in Pernambuco, will process 230,000 barrels of Brazilian and Venezuelan heavy oil per day, with the production of diesel being the focus of this unit to meet the growing demand in the Northeast region of Brazil. Th e target is to produce diesel with 10 parts of sulfur per million, with low sulfur content and excellent quality, for engines with Euro 5 technology. Th is diesel, presently sold in the European market and in the United States, could be commercialized by Petrobras in both markets. In Brazil, it will be destined for engines that are not yet available, but will be manufactured in the country within three years. Th e annual production forecast for the refi nery is around 814,000 m3 of petrochemical naphtha, 322,000 tons of LPG, 8.8 million tons of diesel, and 1.4 million tons of petroleum coke.
Brazil Oil and Gas: In technological terms, the refi nery will be a mark for Petrobras, because it will be the company's, and Brazil's, fi rst unit to process 100% heavy oil, won't it?
Paulo Roberto Costa: It's true. Th e other Petrobras refi ning units and the other refi ning units in Brazil still depend on mixing light oil with heavy oil, which is called blending, for the production of oil products. Th e advantage of the Abreu e Lima Refi nery will be refl ected in economic benefi ts for Petrobras, given that the refi nery will process a type of oil that is cheaper in the international market and sell products with greater added value and therefore more profit.
Brazil Oil and Gas: The Premium I Refi nery is planned to be Petrobras' largest. What contribution will it make to the company's strategy?
Paulo Roberto Costa: Th e refi nery, which is under construction in Maranhão, will refi ne a third of all the Brazilian oil currently produced by Petrobras. It will have a marine terminal and pipeline right of way to receive oil and export oil products with a low sulfur content and excellent quality.
The unit will supply the internal market and will also be able to export the excess of diesel to other markets. It will have the capacity to process 600,000 barrels of oil per day. It will begin operating in two phases: the fi rst is forecast for 2013, when it will process 300,000 barrels of oil per day; the second is planned for 2015, when it will operate at full capacity.
Brazil Oil and Gas: Th e Premium II Refi nery is to be constructed in Ceará. Will it have its production directed essentially towards the external market?
Paulo Roberto Costa: Yes. In that state, we will construct in the Pecém Port and Industrial Complex a refi nery that will produce diesel oil of 10 ppm, jet oil, naphtha, LPG, and coke. Th e unit will begin operations in two phases; the first, with the capacity to process 150,000 barrels of oil per day, and the second with equal refi ning capacity. Th e original idea is to begin opera tions in the fi rst phase in 2013 and to begin the second phase, at full capacity, in 2015.
Petrobras will cease to be an importer and become an exporter of oil and oil products.
Brazil Oil and Gas: Are the locations of the Abreu e Lima, Premium I and Premium II refi neries in the Northeast region of Brazil more advantageous for Petrobras business?
Paulo Roberto Costa: Without a doubt. Geographically closer to the sea and to ports than the Petrobras refi neries situated in the Southeast region, these new refi neries will provide a reduction in freight costs for the exportation of oil products. Accordingly, the prices of Petrobras products will become more competitive in the external markets and this will result in a competitive advantage for the company.
Brazil Oil and Gas: Th e Clara Camarão Refi nery, situated in the Guamaré complex in Rio Grande do Norte, is another of the Petrobras units destined to raise the refi ning capacity of the company. How is this going to happen?
Paulo Roberto Costa: Th e refi nery presently processes 30,000 barrels of oil per day produced from the Rio Grande do Norte onshore and off shore fi elds. But it will be expanded. It will have a gasoline production unit, nine tanks, 23 km of pipelines (19.6 km of which are subsea), and a new buoy set that will enable the mooring of ships up to 50,000 tons. Once the infrastructure and expansion work is concluded, an investment of US$ 215 million, the unit will produce 21,000 m3 of gasoline, 45,000 m3 of diesel, 7,500 m3 of jet fuel, 11,700 m3 of LPG, and 3,000 m3 of petrochemical naphtha per month, making the state of Rio Grande do Norte self-suffi cient in oil products.
Brazil Oil and Gas: Finally, so far as refi ning is concerned, the Petrochemical Complex of Rio de Janeiro, which begins operations in 2012, will be the fi fth Petrobras unit to fulfi ll a relevant role in increasing the company's refi ning park. How will it contribute? Paulo Roberto Costa: COMPERJ will increase the Brazilian ca pacity to refi ne heavy oil from the Campos Basin, adding value to this oil, which would yield less to Petrobras if it were sold abroad than the commercialization of oil products. Th e complex will also reduce the Brazilian imports of petrochemical products, generating annual savings for Brazil of around US$ 2 billion in foreign currency. In addition, it will supply the internal and external markets with second generation products. Initially, the unit will process 150,000 barrels per day of heavy oil, but it will be able to double its production capacity and become more competitive. Th e complex will have a refi ning unit, a fi rst generation or basic petrochemical unit, for the production of basic petrochemical products, such as ethylene and propylene. It will include a group of second generation units that will transform basic products into petrochemical products such as styrene, ethylene- glycol, The Pecém Marine Terminal. polyethylene, polypropylene, and PTA. In addition, it will have a utilities center, responsible for the supply of water steam, and electricity for the entire complex. Th ird generation or manufacturing industries should be installed in the surrounding area.
Brazil Oil and Gas: Will the increase in the Petrobras refi ning capacity make Brazil selfsuffi cient in oil products between 2012 and 2013?
Paulo Roberto Costa: Yes. Petrobras presently imports LPG, jet fuel, diesel, and naphtha in addition to around 300,000 bpd of light oil, which are used for manufacturing Petrobras lubricants in the REDUC refi nery in Rio de Janeiro and for blending with heavy oil for processing in several refi neries in the Petrobras System. On the other hand, the company exports gasoline, fuel oil, and bunker. Now that the production has begun in the fi elds in the pre-salt area, the volume produced allied to the increase in refi ning capacity will make Brazil self-suffi cient in oil products between 2012 and 2013. Petrobras will change its profi le. It will cease to be an importer and become an exporter of oil and oil products.
Brazil Oil and Gas: In parallel, Petrobras has progressively strengthened its presence in the petrochemical area. It recently increased its stake in the capital of Braskem, which acquired the shares of Quattor previously detained by Unipar, and became the largest petrochemical company in the Americas. What are Petrobras' intentions here?
Paulo Roberto Costa: Oil companies in general have a strong presence in the petrochemical area, because what they generate in the refi ning of oil serves as raw material for the petrochemical industry, especially for the production of polypropylene and polyethylene resins. For this reason, refi ning and petrochemical operations are integrated. In 2004, Petrobras began to restructure the petrochemical sector. It bought the Ipiranga Group jointly with Braskem and the Ultra Group. It acquired Suzano Petrochemicals alone. It formed Quattor Petroquímica S.A. with Unipar. It moved from an unimportant minority stakeholder to a relevant stakeholder in Braskem and increased its participation in both the capital and the management of the company. Now Braskem has bought Quattor, becoming the eighth largest petrochemical company in the world and the largest in the Americas with 26 petrochemical plants among its assets. We still want to elevate it to the fi fth in the world within fi ve or so years. Th e target of Petrobras is to generate stronger companies that are integrated, with greater synergy between refi ning and petrochemicals, so that it becomes more competitive in the global market, as well as effi cient, technologically capable, with scale gains and a greater capacity for investment and growth. In this way, the company will leverage the development of Brazil, increase its international presence, and be on the right road to becoming one of the largest integrated energy companies in the world, as foreseen in its Business Plan.
