PETROBRAS, BRAZILIAN STATE-OWNED OIL COMPANY, CONSIDERING ENTERING ETHANOL BUSINESS

"O Globo Online"
Via Ethanol Brasil
January 17, 2007

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Petrobras, Brazil’s state-owned oil company, has been considering the possibility of producing fuel-grade ethanol from sugarcane to meet growing demand, said a company executive on Wednesday, January 17, 2007.

Petrobras already operates in the transportation and distribution of ethanol (previous post) both in Brazil and abroad.

“The company Board still hasn’t made a formal decision… We are still studying the possibility”, Mr. Nilo Carvalho Vieira Filho, the company’s Executive Manager for Marketing and Business, said at the Reuters Global Biofuel Summit.

Speaking from company headquarters in Rio de Janeiro, Mr. Carvalho said Petrobras seeks to take advantage of the growing international demand for alternative sources of energy.

He said that, since the Oil Crises of the 1970s and 80s, Petrobras has been involved in the development of ethanol as fuel, initially serving only the Brazilian market.

“Brazil has a favorable climate, as well as the necessary technology and the lowest costs of production”, he said. “We are looking for new clients, opening up global frontiers”.

Mr. Carvalho said that Japan Ethanol Trading, a 50-50 joint venture between Petrobras and a Japanese state-owned trading company, is developing the Japanese ethanol market.

Commenting on a report from Reuters in Tokyo on the imports of MTBE from France as a gasoline additive, Mr. Carvalho said that this fact does not exclude the use of Brazilian ethanol, for the demand for energy is very robust.

Petrobras is already exporting ethanol to Venezuela and hopes to sell the fuel to Nigeria and countries in Scandinavia this year.

“Every day we receive new demonstrations of interest from other countries”, he added.

The company is also offering technical assistance for the use of ethanol, in agreements with South Africa, Venezuela, and Nigeria.

The United States has the capacity to find its own alternatives, but Petrobras has extensive experience with fuel ethanol, which can be used to develop solutions when the need arises, said Carvalho.

Mr. Carvalho said that ethanol exports are expected to rise to 850 million liters in 2007, compared to 120 million in 2006.

Shipments have included sales to the United States, directly or through the Caribbean, a region that has preferential access to the American market. Mr. Carvalho noted that sales were not larger because of U.S.-imposed tariffs.

Follow what's happening in the Brazilian ethanol market on Ethablog, the only blog in English dedicated to Brazilian ethanol.