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Brazil's Petrobras buys gasoline from Braskem in November
[RIO DE JANEIRO] Brazil's state-controlled oil company Petróleo Brasileiro SA agreed to buy 82,000 cu m (515,764 barrels) of gasoline from Braskem SA in November, bolstering supplies of the fuel as Petrobras faces its biggest strike in 20 years.
Petrobras, which owns 36 per cent of Braskem, signed the contract on Oct 26 and will receive the fuel from the petrochemical company's operations in the states of Rio Grande do Sul, São Paulo and Bahia, Petrobras said in a regulatory filing late on Wednesday.
No price was given, but the cost reflects the lower retail price for gasoline in Brazil than in the international market.
Petrobras and Braskem have been in talks about extending a long-term naphtha supplying contract for months. Petrochemical naphtha, a light hydrocarbon, is a common feedstock for petrochemical firms like Braskem. Naphtha itself can be blended to make gasoline.
The gasoline contract provides Petrobras with fuel just as a strike, already the biggest in 20 years, cuts crude oil output and threatens to reduce production of vehicle fuels such as gasoline and diesel.
The purchase also eases the impact on Petrobras of a 30 per cent decline in the value of Brazil's real against the US dollar this year, by reducing the company's fuel-import needs.
The naphtha contract, which has shielded Braskem from international prices, is seen as crucial to helping the company stave off losses as it competes with international petrochemical companies, particularly in the United States, that are using cheaper natural gas as a feedstock.
Petrobras, though, has found irregularities in its naphtha contracts with Braskem, and Braskem is controlled by the Odebrecht Group, a company at the center of a giant price-fixing, bribery and political kickback scandal that has severely damaged Petrobras' reputation with investors.