Brazil’s Petrobras Says Buying Out Shell in South America Is a Strategic Decision

Brazilian government owned oil-company Petrobras confirmed the acquisition of Anglo-Dutch oil giant Royal Dutch Shell assets in Colombia, Paraguay and Uruguay totalling US$ 140 million.

Under the terms of the deal, the Brazilian oil company will acquire 38 service stations in Bogota, Colombia, a commercial fuels business, a lubricant processing facility in Puente Aranda and an oil depot in Santa Marta.

In Paraguay, Petrobras is buying 134 service stations located across the country, as well as a liquefied petroleum gas (LPG) business and aviation fuel operations at the Asuncion and Ciudad del Este airports.

Petrobras in Uruguay will take over 89 service stations, aviation fuel facilities at the Montevideo airport and an asphalt business.

"The businesses are being sold as going concerns with nearly all staff transferring with these businesses to Petrobras. As a result, Shell does not envisage any significant impact on employment or on the national economies arising from these transactions," reported Shell Oil.

Petrobras pointed out that the purchase of assets in the three South American countries was in line with its strategic plan, which calls for creating an integrated energy company with a strong presence in Latin America.

Last week, Brazil and Venezuela broke ground on a refinery that will be jointly operated by the two countries’ government owned oil firms.

The General José Ignacio Abreu e Lima refinery, located in Suape, a port city 40 kilometers from Recife in northeastern Brazil, is a joint venture by Venezuelan oil giant PDVSA and Petrobras.

Brazil and Venezuela are each investing US$ 2.5 billion in the project, which is to begin operations in 2011 with a processing capacity of 200,000 barrels per day of crude. Petrobras has proven oil and natural gas reserves equivalent to more than 11 billion barrels.

Of the company’s reserves, 10.57 billion barrels are in Brazil and 1.25 billion in the other eight countries in which Petrobras operates.

Petrobras, the largest government owned company in Brazil, lists its shares and bonds on the stock exchanges in New York, Madrid and São Paulo.

The company’s current daily crude production is between 1.5 million and 1.6 million barrels. Petrobras which is a leading company in deep sea hydrocarbons production is concentrated in making Brazil self-sufficient. Proven reserves at current consumption levels are estimated in 21.3 years.

Mercopress – www.mercopress.com

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