A joint venture between the Brazilian oil company Petrobras and the Portuguese Galp for the production and distribution of biofuels requires investment of approximately 910 million Brazilian reais (US$ 480 million) and should be running by 2010, according to the president of the Portuguese company, Manuel Ferreira de Oliveira.
The announcement of the partnership was made on Tuesday, July 3, An agreement signed on Wednesday, in Lisbon, in the sidelines of the Brazil-European Union Summit, forecasts that both companies should have 50% in the new partnership, to promote the investments.
Of the total volume of funds to be put into the project, Ferreira de Oliveira said that approximately 650 million reais (US$ 340 million) will be turned to the adaptation of Galp refineries for the processing of biofuels.
Apart from production of second-generation biodiesel in Galp refineries, from vegetable oils produced in Brazil, the project also includes, production for export and the sponsoring of agricultural production of oleaginous plants, both in Brazil.
In the industrial project in Brazil, investment will be between 260 million reais and 312 million reais (US$ 140 million and US$ 160 million), according to Ferreira de Oliveira.
In the third dimension of the project, agriculture, investment will be "made by the farmers themselves", supported by contracts for sales to the new joint venture, stated the executive.
The project involves the farming of around 600,000 hectares of land in Brazil and a total annual production of 600,000 tons of vegetable oil. Half will be processed in Galp refineries and the other half in Brazil, for later export to Portugal or other European countries.
To Galp, the agreement is "a decisive process to concretize the biofuel strategy and contributes to the positioning of Portugal at the forefront of production of second-generation biofuels."
Petrobras points out that the Brazilian production of biofuels forecasted for 2008 should generate produce for "almost immediate" export.
Apart from that, according to a statement disclosed on Wednesday, demand on the Portuguese market is guaranteed due to the engagement that Portugal has taken on with the European Union, forecasting that by 2010, one tenth of the fuel used in the country will be "green".