Brazil-Venezuela refinery planned; fire shuts down PDVSA Cardon refinery

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Sunday, April 27, 2003 By: David Coleman

Under a preliminary contract signed between Petroleos de Venezuela (PDVSA) and Brazilian Petrobras, Venezuela and its southeastern neighbor Brazil are to study the joint construction of an oil refinery to supply a chain of filling stations throughout northeastern Brazil.

Announcing the news today, President Hugo Chavez Frias said that meetings held in Recife (Brazil) with President Luiz Ignacio a Silva and leading Brazilian business executives and government officials have begun to take concrete form as part of a regional integration strategy.

"We will construct a refinery in Recife with investments from both Venezuela and Brazil ... it will be a perfectly mixed joint venture with other world investors who are in accord with our plans," the Venezuelan President said.  "We have signed a Letter of Intent for direct collaboration on this goal between PDVSA and Petrobras ... we will bring heavy crude oil by river right to Recife.

Meanwhile, back home in Venezuela, oil technicians have been forced to shut down an 80,000 barrels-per-day gasoil processing unit at the 940,000 bpd Amuay-Cardon refinery in northwestern Falcon State after a fire which broke out close to midnight Saturday.  The blaze was quenched by onsite PDVSA employees who discovered some damage sustained by the gasoil unit.

PDVSA public affairs spokesman Humberto Reyes has told reporters that although the refinery will be out of service for a week, the effects will only be limited ... "production and dispatch of gasoline will not be affected because the other three units will compensate for the outage on No.4."

Reyes was also at pains to deny political opposition rumors that there had been an explosion at the refinery and said that an investigation committee had already begun to probe why the fire broke out ... against the possibility that sabotage was involved he said "we are not excluding anything at this stage!"

PDVSA has been working to normalize operations at the 1.3 million bpd refinery after an opposition-led 2-month lockout aimed at strangling the nation's economy to force democratically-elected President Hugo Chavez Frias out of office.  The misnomered "strike" failed in early February this year and as a direct result more than 17,000 oil workers have been fired for security reasons.