Petrobras Buys 50% of Texas Refinery

4 February 2006

Petrobras, the Brazilian state-owned oil company, is paying US$370 million for a 50% stake in a Texas refinery. This marks Petrobras’ first joint venture with a US refiner and will provide more access to the North American market.

Petrobras is taking the stake in the 100,000-barrel-per-day Pasadena Refining System refinery, owned by Astra Oil Trading NV, a division of Belgium’s Transcor International NV. Astra had acquired the refinery from Crown in January 2005.

The Pasadena refinery is currently undergoing upgrading to meet new EPA Clean Air Standards for gasoline and diesel. With the entry of Petrobras, the refinery will be further upgraded to process heavy, high-sulfur oil such as that from Petrobras’ Marlim field in the Basin de Campos.

Petrobras is targeting heavy-oil capacity of 70,000 barrels per day for the refinery (about 70%). The upgrades are due to be concluded in four years.

This purchase is in line with Petrobras’ strategic plan to consolidate itself as an integrated energy firm with a strong international presence, expanding its refining and sales activities, both at home and abroad.

—Petrobras statement

Petrobras expects to become a net oil exporter this year for the first time. It anticipates average production of 1.91 million barrels of oil a day in 2006, up from an average of 1.68 million in 2005. Brazil’s domestic oil consumption is estimated at 1.85 million barrels daily.