Petrobras expects a $14.3 bln loss on Comperj refinery -O Globo

Tue Apr 7, 2015 10:37am EDT

Petrobras expects a $14.3 bln loss on Comperj refinery -O Globo


(Reuters) – Brazil’s state-run oil company Petrobras will lose at least $14.3 billion on its unfinished Comperj refinery, nearly 12 times more than the plant is expected to earn from operations over its lifetime, O Globo reported, citing a company submission to a government watchdog.

The projected loss at the planned 165,000-barrel-a-day plant now under construction, is more than double the refinery’s initial $6.1 billion price tag, Globo said. The newspaper’s report cited documents prepared by Petrobras finance officials and filed with Brazil’s Union Accounts Court.

The court, known by its Portugues initials TCU, is an arm of Brazil’s Congress that reviews and regulates spending by Brazil’s government, its agencies and companies.

The reasons for the projected loss include unrecoverable investments and maintenance, O Globo said. The paper added that the refinery is one of several giant refinery projects where, according to police and prosecutors, a cartel of construction and engineering companies conspired with top Petrobras executives to overcharge for work.

Some of those excess payments were then kicked back to Petrobras executives and politicians allied with Brazilian President Dilma Rousseff as bribes or campaign contributions

Petrobras officials were not immediately available for comment. The TCU press office told Reuters that the document referred to by O Globo was not a public document and that it will only be released when the TCU investigation is complete.

TCU investigations of Comperj starting in 2011 and 2013 discovered potential losses of hundreds of millions of dollars, the TCU said in a statement.

In recent years the TCU has regularly investigated Petrobras and its more than $40 billion a year of spending.

O Globo also reported that the Petrobras study of Comperj submitted to the TCU determined that Petrobras would lose $17 billion if it abandoned the unfinished refinery today.

Originally planned as petrochemical refinery, work is years behind schedule and its will now focus on gasoline, diesel and other fuels production. The first of two crude oilprocesing lines processing lines, known as trains, at the planned 165,000-barrel-a-day refinery is 85 percent complete. (Reporting by Jeb Blount Editing by W Simon)

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