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Petrobras Signs Memoranda of Understanding in Japan for Financing Strategic Projects
(Rio de Janeiro, May 27, 2005). – PETRÓLEO BRASILEIRO S/A - PETROBRAS, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex: XPBR/XPBRA], a Brazilian international energy company, announces that today, during the official of visit of President Luiz Inácio Lula da Silva and presidential committee to Japan, Petrobras’President, José Eduardo Dutra, signed four memoranda of understanding with Japanese financial institutions for the joint financing of projects included in the Company’s Strategic Plan for the period up to 2010 and for providing incentives for the export of Brazilian ethanol.
Memorandum of Understanding for a Strategic Partnership with JBIC (Japan Bank for International Cooperation)
A memorandum of understanding was signed with the Japan Bank for International Cooperation (JBIC) for a strategic partnership, consolidating the already existing relationship, and for identifying and establishing areas of cooperation and strengthening the mechanisms for monitoring the relations between the two companies.
The document underlines the important contribution of JBIC financing for Petrobras’ projects in the areas of Exploration and Production, Refining and Natural Gas. It also recognizes Petrobras’ significant contribution in consolidating the bilateral relationship between Japan and Brazil through the creation of various business opportunities for Japanese entities.
Memorandum of Understanding for the Henrique Lage Refinery’s Modernization
A memorandum of understanding was signed for the modernization of the Henrique Lage Refinery – Revap in São José dos Campos (SP), establishing the terms and conditions of financing up to US$ 900 million, and involving the construction of a Delayed Coking Unit and a Diesel Hidrotreatment Unit as well as correlated work. Work is planned to begin in the third quarter of 2005, start-up being scheduled for the first quarter of 2008.
The signing parties to this document were the Japan Bank for International Cooperation (JBIC), Nippon Export and Investment Insurance (NEXI), the Sumitomo Mitsui Banking Corporation (SMBC), Mitsui Co & Ltd, Itochu Corporation, and Petrobras.
The terms and conditions of the financing involve a tenor of 15 years for debt amortization, with a 3.5 year grace period. The finance of US$ 900 million will be provided by: JBIC (US$ 486 million); a pool of commercial banks led by SMBC, with export credit insurance from NEXI (US$ 324 million) and Mitsui and Itochu (US$ 90 million).
The project for modernizing Revap, Petrobras’ fourth largest refinery, is designed to increase the conversion of fuel oil into lighter oil products, upgrade refinery capacity for processing heavy Brazilian crude, adjust diesel oil output to new domestic specifications, initiate the refinery’s coke trading business and reduce emissions.
Memorandum of Understanding for the Financing of the Strategic Plan’s Capital Expenditures Program
Petrobras signed a further memorandum of understanding with Nippon Export and Investment Insurance (NEXI) and Sumitomo Mitsui Banking Corporation (SMBC), establishing the terms and conditions for financing up to US$ 300 million of the Company’s capital expenditures program under the Strategic Plan for the 2004-2010 period.
The Term Sheet establishes a tenor up to 12 years for amortization with a 4 years grace period. It also establishes that the US$ 300 million will be provided by a pool of commercial banks led by SMBC and insured by NEXI.
Memorandum of Understanding for Exports of Ethanol
A memorandum of understanding was also signed with Companhia Vale do Rio Doce and the Japanese corporation, Mitsui, with the purpose to study the possibility of reducing, in Brazil, the logistical costs of exporting Brazilian ethanol to the Japanese market, making it an economic and sustainable solution for reducing the Japanese dependence on oil.
The use of alcohol will allow Japan to comply with its commitments following the signature of the Kyoto Protocol. For Brazil, the implementation of this specific infrastructure for ethanol may act as a key incentive for increasing the output of this renewable fuel for the export market. It also implies considerable further possible gains for the Brazilian trade balance together with a reduction in the emissions of pollutants, which affect the ozone layer.
With this new project, Brazil will be increasing its contribution to expanding beyond its frontiers, domestically produced ethanol, the biggest initiative ever in the world of an industry already installed for producing a renewable alternative to fossil-based automotive fuels.
Raul Adalberto de Campos– Executive Manager
E-mail: petroinvest@petrobras.com.br
Av. República do Chile, 65 - 4th floor
20031-912 – Rio de Janeiro, RJ
(55-21) 3224-1510 / 9947
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PETRÓLEO BRASILEIRO
S.A--PETROBRAS | ||
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By: |
/S/ José Sergio Gabrielli de Azevedo
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José Sergio Gabrielli de Azevedo
Chief Financial
Officer and Investor Relations Director
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