Refinery projects on time despite construction hurdles, says Petrobras

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Monday, January 7, 2013

Brazil's state-run oil company Petrobras (NYSE: PBR) says its Abreu e Lima oil refinery remains on track to be partially ready in 2014 despite continued construction delays.

The 230,000b/d facility was originally earmarked for a July 2012 startup after work at the site in the northeastern city of Recife began in 2009.

"Progress has been impacted by higher than expected rainfall, difficulty in obtaining skilled labor and several worker strikes," Petrobras said in a statement.

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The company added the cost of the project had risen from a forecast US$13.4bn to US$17.1bn.

Last August Petrobras CEO Maria das Graças Foster said she remained hopeful Venezuela's state oil company PDVSA would fulfill its commitment to the refinery after buying a 40% stake in 2005.

PDVSA is reportedly seeking a US$4bn credit line from Brazilian development bank BNDES to help fund the project.

Petrobras also said the first unit of its 300,000b/d Comperj petrochemical complex in Rio de Janeiro state is on target for a 2015 startup.

The facility, whose budget has soared to US$12bn from US$8bn, was originally planned to open in 2013 after construction work began in 2009.

Petrobras is also expected to begin operating the Premium I and II facilities in the country's northeast by 2018.

Analysts say the projects are vital to boosting local oil production and reducing Petrobras' soaring fuel import bill.