Petrobras could revive stalled refinery projects

Friday, September 25, 2015

Brazil could revive plans to build the Premium I and II refineries to meet an expected rebound in demand for oil derivates within two years, according to energy minister Eduardo Braga.

State-run oil firm Petrobras removed the projects from its business plan in January in response to a crippling corruption scandal and falling oil prices.

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Located in Brazil's northeast, the refineries were expected to be completed by 2018 at a combined cost of US$28.5bn.

"We believe that Premium I and Premium II will be put back on the agenda due to the fact that we need refining," Braga said in comments published on the mining and energy ministry website.

"The circumstances that lead Petrobras to cancel, suspend or postpone projects are not structural, they are cyclical. These situations can change, but macroeconomic and structural facts remain the same."

As recently as last year, Petrobras said Premium I and II were crucial in its efforts to reduce oil derivative imports and slash the company's debt, which stands at about US$170bn.