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Petrobras to shut refinery, exit Japan: Nikkei

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Brazil's state oil company Petrobras is exiting Japan due to shrinking oil demand, shutting down its refinery in Okinawa as early as this year and building an import terminal it will sell to another refiner, the Nikkei reported on Friday.

[TOKYO] Brazil's state oil company Petrobras is exiting Japan due to shrinking oil demand, shutting down its refinery in Okinawa as early as this year and building an import terminal it will sell to another refiner, the Nikkei reported on Friday.

Petrobras had said as early as 2011 that it would consider selling the 100,000-barrels-per-day (bpd) Nishihara refinery on the southwest Japanese island of Okinawa to focus on the development of its domestic offshore oil discoveries.

But no sale ever materialized, and industry sources and analysts have said there is a limited pool of buyers who would be interested in a small simple refinery that processes only expensive crude in Japan, where fuel demand is on the wane with an ageing population.

Petrobras will build an oil terminal on the site to receive fuel products from South Korea and other Japanese refiners, before trying to sell the facility to another oil marketer, the Nikkei business daily reported without identifying sources.

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A spokesman for Nansei Sekiyu, the wholly-owned Petrobras subsidiary that operates the refinery, said the company could not immediately comment on the Nikkei report.

Petrobras had earlier also considered upgrading the refinery with more complex secondary units and boosting sales to China, the world's second largest oil importer after the United States.

The Brazilian company bought 87.5 per cent of Nansei Sekiyu in 2008 for around 5.5 billion yen (S$63.18 million) from Japanese refiner TonenGeneral Sekiyu, and made it a wholly-owned subsidiary in 2010.

Petrobras has been embroiled in a corruption scandal at home for the past year, with police and prosecutors saying that company officials appointed by leading politicians conspired with construction and engineering executives to inflate contract prices.

REUTERS

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