Gulf Oil to invest US$85mn in fuel retailing

Arab-European oil company Gulf Oil International will invest 250mn reais (US$85mn) to build a fuel distribution network with 600 service stations in Brazil over the next six years, Agencia Estado news service reported. The retail chain aims to pave the way for the possible construction of a US$2.3bn refinery in the northeastern state of Rio Grande do Norte. Gulf Oil would have between a third and two-thirds stake in the refinery, which could have processing capacity of between 180,000 and 230,000 barrels day (b/d). Gulf Oil plans to sign agreements with the some 10,000 service stations that currently do not carry other distributors' flags. The new chain will be mostly located in the country's southeastern and southern regions. The company is already in talks with Petrobras' fuel retail unit BR Distribuidora over the supply agreement. Petrobras has said that it is studying building a new refinery by 2010, as demand rises. Petrobras controls 98% of Brazilian refining market. Gulf Oil divested from Brazil in the late 1950s when it sold its local venture to Brazilian oil company Ipiranga.