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Brazil could boost fuel exports after refinery privatizations, says executive

Credit: REUTERS/SERGIO MORAES

Brazil could boost production and exports of fuels after refineries are privatized, Anelise Lara, head of refining at state oil company Petroleo Brasileiro SA, said on Tuesday.

By Sabrina Valle

RIO DE JANEIRO, Aug 4 (Reuters) - Brazil could boost production and exports of fuels after refineries are privatized, Anelise Lara, head of refining at state oil company Petroleo Brasileiro SA PETR4.SA, said on Tuesday.

Refineries currently operating at 80% capacity could ramp up to full capacity as private companies enter the market, leaving a surplus for international sales, Lara said.

Petrobras, as the state-controlled producer is known, is selling eight refineries that account for half of Brazil's refining capacity, ending its virtual monopoly in the industry.

The privatizations will introduce competition and change fuel pricing in Brazil, Lara said.

"It will be new market dynamic, one that never existed before in Brazil," she said during an event promoted by IBP, an oil industry group.

Petrobras currently makes more profit if it reduces output at its refineries and takes advantage of cheaper fuels available on the international market.

The company currently competes only with fuel importers, but private operators will likely have market incentives to operate at full rates, Lara said.

"If they can raise it to 100% they will, and sell on another market," she said.

(Reporting by Sabrina Valle; editing by Jonathan Oatis and Jane Wardell)

((Sabrina.Valle@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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