Saturday, June 5, 2010
Refineries: priority investment in the offshore sector.
Refining, the bridge between production and distribution, plays a strategic role in the sustainability of Brazilian self-sufficiency in oil derivates. Petrobras' goal of processing most of the national oil by expanding its refining park, optimizing its employment, redoubling care with safety and environment and producing derivatives of international standard, makes the refining park a priority in the bulk of Petrobras investments.
With an eye on the expansion of the refining park, an area considered strategic in the oil industry aggregate value chain, Petrobras has already announced: it will maintain its new refinery delivery schedules, thereby enlarging the refining capacity in Brazil. Petrobras Business Plan 2009-2013 foresees investments in the order of US$ 174.4 billion by 2013, of which U.S. $ 47.8 billion will be invested in the supply area. This is the second largest investment sector of the Brazilian state company, losing only to the area of Exploration & Production (U.S. $ 104.6 billion).
The supply area comprises the activities of refining, transportation, marketing, petrochemicals and fertilizers. Keeping the commitment to sustainable development, Petrobras 2009-2013 BP aims to the expansion of operations in the target markets for oil, derivatives, petrochemicals, gas and energy, biofuels and distribution, being a world reference as an integrated energy company.
The company foresees investments in the building of refineries Abreu e Lima (Pernambuco), Clara Camarão (Rio Grande do Norte), Premium I (Maranhão) and Premium II (Ceará), Petrochemical Complex of Rio de Janeiro (COMPERJ) and Petrochemical Complex of SUAPE (Pernambuco) and a new unit of nitrogenated fertilizers.
Works for conversion and product quality in the existing refineries, with emphasis on the goals of producing gasoline and diesel with lower sulfur content, are also foreseen, as well as investments in pipelines and terminals.
Petrobras’ goal, according to the company's director of Supply, Paulo Roberto Costa, is to expand the refining capacity in Brazil, maintaining the balance with the production of oil. Abreu e Lima refinery will have processing capacity of 230 thousand barrels per day. Comperj, 150 thousand barrels per day. Premium I Refinery in Maranhao, 600 thousand barrels per day.
Premium II, in Ceará, 300 thousand. And the refinery of Rio Grande do Norte, 30 thousand bpd. The company plan envisages the deployment of the third factory of fertilizers, the production capacity of one million tones per year.
The load of processed oil will probably grow from the current 1.791 million barrels to 2.270 million in 2013 and 3.012 million in 2020, with an average annual increase of 4.8%. In 2010 it is forecast the start of the refinery Clara Camarão, in 2011 Abreu e Lima, in 2012 Comperj in 2013 the first stages of Premium refineries.
The Plan provides for annual growth of 3% for the derivatives on the domestic market, going up from 1.945 million barrels daily in 2008 to 2.257 million daily in 2013 and 2.876 million per day in 2020. The derivate of higher consumption will still be diesel, which should rise from current 783 thousand barrels per day to 901 thousand barrels per day in 2013 and 1.224 million barrels daily in 2020.
Refining Park: non-stop growth
Since Mataripe (the first Brazilian refinery, currently refinery Landulpho Alves - BA) in the mid 50's, up to the present day, the Brazilian refining park has always been growing, absorbing large contracts. Since then, Petrobras already has 11 processing units in Brazil and four abroad. Not to mention the only two private refineries in the country - Manguinhos, in Rio de Janeiro, which handles 15 thousand barrels of oil daily, and Ipiranga, in Rio Grande do Sul
However, besides not working with all the installed capacity, Brazilian refining structure was designed to process light oil, though most of the national reserves is heavy oil. This means that not all oil extracted from Brazilian soil can be transformed in our own units. This is the reason that obliges the country to continue importing oil, even having achieved self-sufficiency.
In this context of billionaire investments, it is important to remember that all infrastructure necessary to maintain the operations of refining, keeps great similarities with the Exploration and Production (E & P) industry. Only in equipment such as vessels, pumps, electric engines, furnaces, fans, compressors, tools, safety valves and tanks refineries consume resounding values, not only in the acquiring, but mainly in keeping the functioning of all this structure (see figures).
Although not being deployed in the sea, the refining scheme provides many other features common to the E & P sector, such as unhealthy environments, handling of dangerous products and transportation of heavy loads, rendering Safety, Environment and Health (HSE) requirements and safety training indispensable.
Sectors such as metal-mechanical, electronics, hydraulic, pneumatic, industrial maintenance, engineering project, building and assembly are just some common segments, absorbed by both the producing regions and refiners. All this without counting the operation in the field of refrigeration, heat treatment, information technology and general services.
Balance between production and refining
At the investors’ information site, Petrobras reaffirms that the company's strategy is to improve the refining capacity, seeking a balance with Petrobras oil production growth, meeting the product quality levels required by the market. In this sense, in 2011 refinery Abreu e Lima (Pernambuco) starts operations. COMPERJ will start operations in 2012, refinery Premium I in 2013, and Premium II in 2014.
The international goals also reflect the integrated Company growth with estimates of production of oil and gas 341 thousand boed in 2013. The estimated Petrobras oil and gas production in Brazil and abroad for 2013 is 3.651 million boed. Two semi-submersible platforms (P-55 and P56) and Mexilhão fixed platform are being built. Still in 2009, 23 more tankers are planned for hiring, adding more 1.7 million TPB, three ships to carry bunker and 24 marine support vessels, from a batch of 148 announced by Petrobras. In coming years, the orders already announced are for 124 support ships, eight semi-submersible platforms and FPSOs and 28 drill ships for well-drilling in deep waters.
Brazilian market consolidates with refining
According to the president of Petrobras, José Sergio Gabrielli, the increasing competitiveness in the petrochemical industry promotes the consolidation of the Brazilian market, granting many benefits to the domestic petrochemical industry, such as the increased ability to raise funds and make investments for expansion.
During the 13th Annual Meeting of the Chemical Industry, Gabrielli stressed that sustained growth forecast for the Brazilian economy, together with new discoveries of oil, provides a favorable long-term scenario for the development of the national petrochemical industry. "We intend to maintain our investments in the petrochemical industry, both following the Braskem and Quattor, of which we are members, and in individual projects."
Among the main projects of the Company in the petrochemical sector, the President highlighted the Petrochemical Company of Pernambuco (Petroquímica Suape), the Integrated Textile Company of Pernambuco (Citepe) and the Petrochemical Complex in Rio de Janeiro (Comperj), the latter with investment of around U.S. $ 8.4 billion. Comperj will increase the national crude oil refining capacity with the consequent reduction in imports of derivatives such as naphtha and petrochemical products.
Recent study by the National Bank for Economic Development (BNDES) indicates that the discovery of oil in the pre-salt layer, generating prospect of abundance of raw materials, and maintenance of the program of investment in refining, including the construction of the Petrochemical Complex of Rio de Janeiro (Comperj), with investments estimated at U.S. $ 8.4 billion, open "auspicious prospects" for the insertion of Brazilian petrochemicals in the international arena.
These are some of the conclusions of the study “Challenges of Brazilian Petrochemicals in the Global Scenery” , elaborated by economist Valéria Delgado Bastos, from the bank’s Chemical Industry Department. The BNDES study shows that a displacement of the production axis will take place following a logic focused on control of raw materials and access to markets. Until recently, the logic of petrochemical expansion was determined by the stage of economic development of producing countries.
Brazil’s industrialization of oil began relative to other countries. Only in the decades of 1930 and 1940 exploration and production effectively began. All the oil was imported, although there were explorers in regions presenting surface mineral oil traces. Only in 1941, the first Brazilian oil well, located in Recôncavo Baiano, came to produce oil.
The refining of oil in Brazil starts even before they found oil in the national territory, which only happens in 1934. The first refinery in Brazil was Riograndense Distillery established in Rio Grande do Sul in the city of Uruguaiana in 1932, joint investment of Brazilians, Argentines and Uruguayans, which operated in discontinuous process and with oil imported from Ecuador through Argentina.
With the Argentinean prohibition of trade of oil to other countries in its ports in 1935, made necessary that the import was done through the port of Rio Grande (RS) which results in the construction of the Ipiranga refinery, inaugurated in 1936, near the port. That very year Matarazzo refinery in São Caetano (SP) is launched. With World War II, problems with supply arise due to the difficulty of importing oil.
In 1950, the Mataripe (BA) refinery was inaugurated by the National Council of Oil, with greater capacity than the already existing refineries, in order to process crude oil extracted in the Recôncavo Baiano. Since the promulgation of Law 2004 of 1953 the refinery became state monopoly, held by Petrobras. This law maintains the existing private refineries with their owners, but prevents them from expanding.
In the 1960s and 1970s, Petrobras has built seven new refineries. The first one built by the Company was Duque de Caxias (RJ) refinery – REDUC - in 1961, still in this period, mainly in the 70s, Petrobras ends up by absorbing a number of private refineries, except Ipiranga and Manguinhos. Law 9478 of 1997 regulated the end of Petrobras refining monopoly and the installation of new refineries depends only on the ANP approval.
Replan completes 37 years with new investment
Petrobras inaugurated in early May the unit of propene separation of Paulinia Refinery (Replan) in São Paulo, which completed 37 years of activity and is the largest one in the state. The investment was $ 275 million and the estimated production is 265 thousand tons of propylene per year.
The unit will supply the market with petrochemical polymer grade propylene, raw material used growing demand with in the production of polypropylene, a thermoplastic resin used in the manufacture of products such as toys, plastic cups, packaging for food, medicines and chemicals.
Propylene is the result of a separation process, in which part of the Liquefied Petroleum Gas (LPG) is destined to its production. The unit will supply Replan’s neighboring company, Braskem –Paulinia Unit. This project includes the project of modernizing Replan, one of the measures to strengthen the activities of Petrobras in the petrochemical sector, according to the company’s Strategic Planning. With the starting of the unit, Petrobras’ production reaches the threshold of 900 tons produced per year, or 37% of the national total.
Modernization of Replan
Paulinia Refinery processes 57,200 cubic meters of oil daily, accounting for 20% of all oil refining in Brazil. The refinery production supplies the markets of São Paulo, Mato Grosso, Mato Grosso do Sul, Rondônia, Acre, the South of Minas Gerais, Triangulo Mineiro, Goias, Brasilia and Tocantins.
In order to modernize Replan, investments are forecast to surpass US$ 3.5 billion by 2013. Besides the propylene unit are other ongoing projects aimed at improving the quality of products, such as new units for the treatment of petrol and diesel.
Petroquímica Suape is a venture led by Petrobras Química SA (Petroquisa) to implement a petrochemical hub in Suape (PE), by combining three integrated industrial units: one for the production of terephthalic acid (PTA), the other to produce polymers and polyester yarns and a third, which will manufacture resin for PET packaging.
When in operation, Petroquímica Suape will be the largest integrated polyester park in Latin America. The choice of the latest technology, scale of production at the level of major industries operating in the world and the integration of industrial units are some of the competitive differentials of the Company, which initiates the operation of three plants in the second half of 2010.
The plant is located in the Industrial and Port Complex of Suape, the most complete center for the location of the port and industrial business in the Northeastern region. With a complete infrastructure to meet the needs of several ventures, Suape has attracted an increasing number of companies interested in placing their products in the regional market or export them to other countries.
Comperj – the Petrochemical Complex of Rio de Janeiro - is being built in an area of 45 million square meters located in Itaboraí, with planned investments of around U.S. $ 8.38 billion. The deployment of Comperj in Rio will stimulate business opportunities for many sectors, consolidate the state as a major business generator in oil and gas and increase the offer of direct and indirect jobs (200 thousand new job vacancies are estimated).
The venture will have capacity to process 150 thousand barrels per day of national heavy oil and is part of the portfolio of Petrobras’ strategic projects and is included in CAP – the Federal Government Program of Growth Acceleration. The start of Comperj operations is scheduled for 2012
In the same plant there will be a refining and first generation unit (Basic Petrochemical Unit - UPB) for production of basic petrochemicals, and a set of second-generation units (Unidades Petroquímicas Associadas - UPA’s), which will transform the basic products into petrochemicals. There will still be a Utilities Central (UTIL), responsible for supplying the water, steam and electricity needed for the operation of the entire complex.
The third-generation companies, which may be attracted by the complex and also settle in the neighboring municipalities and along the Highway Arc, which connects the Ports of Itaboraí and Itaguaí, will be responsible for transforming the second-generation petrochemical products in consumer goods, such as: cups and plastic bags, components for cars assembly industries and white line products such as home appliances, among others.
The bulding of Comperj will significantly influence the socioeconomic profile of the region of influence of the venture, creating new business opportunities in several areas. The municipalities of Cachoeiras de Macacu, Casimiro de Abreu, Guapimirim, Itaboraí, Magé, Maricá, Niterói, Nova Friburgo, Rio Bonito, Rio de Janeiro, São Gonçalo, Saquarema, Silva Jardim, Tanguá and Teresópolis will be influenced by the complex.
The deployment of Comperj will stimulate the installation, in municipalities of the venture area of influence, of consumer goods industries which have petrochemical products for basic raw materials.
Petrobras forecasts new investment in Repar
Responsible for 12% of the domestic oil production, President Getúlio Vargas Refinery - Repar, a unit of Petrobras System located in Araucaria (PR), celebrated 32 years of activities late in May. The plant processes 32 million gallons of oil per day and its products supply the states of Paraná, Santa Catarina and Mato Grosso do Sul, as well as the south of São Paulo state. Around 15% either complete the supply of other regions or are exported.
The refinery is the largest contributor of ICMS to the state of Paraná, accounting for 21% of the levy. In 2008, Repar alone paid over $ 2.1 billion in taxes. On the eve of its anniversary, Repar was honored by the Federal Technological University of Paraná (UTFPR) as the distinguished company of the year.
Petrobras will invest about US$ 6 billion in the modernization of Repar, which will involve increasing product quality and capacity of the refinery. The building of 19 new units is planned, which will produce petroleum coke, gasoline and diesel, cooking gas, propylene and hexane, besides raising the refinery production capacity by 10%.
The new ventures will further ensure a significant environmental gain, by reducing the sulfur content of diesel to 50 ppm, consequently improving the air quality.
Petrobras will enhance the use of domestic heavy oil, reduce imports and enable export to markets that have more stringent environmental laws.
Russians want refinery in Paraíba
The Russian oil company Alstar do Brasil requested information from the Government of Paraiba to study the establishment of an oil refinery in the state. In the document, the company requests a description of the city the government considers best located for the business, as well as the local particulars and climate conditions.
The infrastructure is a point highlighted by entrepreneurs who also want to know the distance from water and natural gas pipelines and which are the power sources in the region. A Russian mission has been in the state with the president of Alstar Oil, Sazukhin Andrey and his adviser Valery Blokhin.
The state faces a new reality with the beginning, soon, of the oil exploitation from the Rio do Peixe Basin. As the refining of oil is one of the main economic activities of Tatarstan, the country of origin of Alstar Oil, the governor believes that the construction of the plant may turn into reality.
In addition to generating the gas which serves as fuel for most cars that circulate in the world, several products are derived from oil, for example, paraffin, LPG, asphalt products, petrochemical naphtha, kerosene, solvents, fuel oils, lubricating oils , diesel and aviation fuel. Petrobras has 15 refineries (11 in Brazil and 4 abroad)
Reman - Manaus (Amazonas)
RLAM - São Francisco do Conde (Bahia)
Regap - Betim (Minas Gerais)
REPLAN - Paulinia (São Paulo)
largest Petrobras oil refinery
Revap - São José dos Campos (São Paulo)
RPBC - Cubatao (São Paulo)
RECAP - Mauá (São Paulo)
REDUC - Duque de Caxias (Rio de Janeiro)
REPAR - Araucaria (Parana)
REFAP - Canoas (Rio Grande do Sul)
Eliçabe - Buenos Aires (Argentina) - San Lorenzo - San Lorenzo (Argentina)
REFINOR - Province of Salta (Argentina)
PRSI - Pasadena (USA) --
FAFEN-BA - Camacari (Bahia) - Production of ammonia, urea, nitric acid and CO2
FAFEN-SE - Laranjeiras (Sergipe) - Production of ammonia, urea, nitric acid and CO2
SIX - São Mateus do Sul (Paraná) - Production of Schist
LUBNOR-CE - Fortaleza (Ceará) - Production of asphalt, oil, Natural Gas and LPG
Refineries under Construction / Expansion
Mini-Refinery - Guamaré (Rio Grande do Norte) - start of activities forecast for 2011
RENESTO - Ipojuca (Pernambuco)
COMPERJ - Itaboraí (Rio de Janeiro) - start of activities for 2012
Refineries in study
Refinery Premium I - São Luís (Maranhão)
Premium II Refinery - Pecém (Ceará) - 300,000 bpd
Refinery to the oil fields of the Pre-Salt. States of Bahia, Espírito Santo, Pernambuco, Rio de Janeiro, Santa Catarina, São Paulo, Sergipe and Piauí have already shown interest in receiving the investment
Abreu e Lima Refinery
Petrobras, in partnership with PDVSA (Venezuela Petroleum S / A), is in studies for the construction of the Abreu e Lima refinery, located in Ipojuca (metropolitan area of Recife) in Brazil. The refining park will be primarily oriented towards the production of diesel with very low sulfur content, aiming to meet the growing demand for derivatives in the Northeast.
The forecast is that the refinery, also known as the Northeast Refinery, will be able to process up to 230 thousand barrels per day of oil - and could use the heavy oil from Brazil and Venezuela, countries that have large reserves. The estimated annual production for this unit of Petrobras also includes 682 thousand cubic meters of petrochemical naphtha, 1.236 million tones of LPG, 9.5 million tones of diesel and 2.2 million tones of petroleum coke.