Eric Watkins
Senior Correspondent
LOS ANGELES, Apr. 2 -- Brazil's state-owned Petroleo Brasileiro SA (Petrobras) has acquired an 87.5% stake in the 100,000 b/d Nishihara refinery in Okinawa owned by Japan TonenGeneral Sekiyu KK, the Japanese subsidiary of ExxonMobil Corp.
Nansei Sekiyu, in partnership with Petrobras, has Sumitomo Corp. as a shareholder that will retain its 12.5% stake in the company.
Sumitomo and Petrobras are expected to spend as much as ¥100 billion to upgrade the Nishihara facilities and boost the cost competitiveness of the refinery as an export base.
Much of the output from the refinery is said to be low-value heavy oil, so Petrobras will build facilities for producing high-value gasoline and kerosine along with a variety of petrochemical materials.
The refinery has an oil and derivative terminal capable of storing as much as 9.6 million bbl, three piers with potential to receive large vessels, and a monofloat for very large crude carriers.
Petrobras said the agreement, valued at some $50 million, marks an important first step in its strategy to launch downstream operations in Asia.
Petrobras, which has discovered fields in Central and South America as well as Africa, is trying to boost exports. This latest move illustrates its plan to be involved in the refinery process and to secure refineries in proximity to markets.
In February, TonenGeneral Sekiyu KK said its net profit plummeted 82.4% last year. The company blamed the earnings erosion on its inability to pass on higher oil prices and shipping charges to its oil products.
Contact Eric Watkins at [email protected].
