Brazil and Venezuela finalized a deal to jointly build and operate an oil refinery in Brazil on Friday as the nations’ leaders signed 15 agreements pledging cooperation in agriculture, energy and technology.
Petroleo Brasileiro SA will hold a 60 percent stake in the new refinery company, and Petroleos de Venezuela SA (PDVSA) will control the rest, according to a statement from Petrobras, as the Brazilian state-run company is known.
The agreements were signed after Venezuelan President Hugo Chavez and Brazilian President Luiz Inacio Lula da Silva rode a tractor together at a soybean farm, pledging to boost trade, which totaled US$5.7 billion last year.
Silva called the agreements a powerful example of South American integration.
He said the two countries and South America as a whole are becoming liberated “from our own blindness; We’ve spent a lot of time without seeing each other, without discovering our potential in politics, culture and trade.”
The two nations have been working since 2005 to finalize the deal; one stumbling block had been a disagreement over the price of Venezuelan oil to supply the refinery. Last year, Petrobras began building the refinery without Venezuela’s help.
The refinery will be capable of processing 230,000 barrels of heavy crude per day and will mainly produce diesel. Petrobras says each company is to supply equal amounts of crude to the refinery, which is projected to cost US$12 billion, up from an initial estimate of US$4 billion.
Meanwhile, PDVSA has agreed to buy nearly half of the government-owned Dominican Oil Refinery (REFIDOMSA) for US$131.5 million, the Dominican Republic’s finance minister said.
Talks to sell 49 percent of the refinery shares concluded late on Thursday after negotiations with a senior Petroleos de Venezuela official, Dominican Republic Finance Secretary Vicente Bengoa said.
“With a partner ... like Venezuela, the refinery over the next years will considerably increase its production and sales,” Bengoa said.
PDVSA official Amilcar Mata said both sides were still working out the final details of the plan, which will be finalized at a ceremony in early this month.
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