Brazil Petrobras, Mitsui Eye Stakes In Ethanol Mills
SAO PAULO (Dow Jones)--Brazilian state-owned oil firm Petroleo Brasileiro SA (PBR), or Petrobras, and Japanese trading company Mitsui & Co. (MITSY) may be planning to take minority stakes in Brazilian ethanol distilleries, the Valor Economico business daily reported Monday.
More than 40 projects are being evaluated by the two companies, but no contracts have yet been signed with any Brazilian sugarcane millers, according to the report.
Petrobras is also studying the possible construction of at least three ethanol mills in Brazil's center-west states as part of a long-term plan to furnish ethanol to Japan, the newspaper said.
For the past few years, Petrobras has been in talks with Japan, a major oil importer, as well as countries from Nigeria to Venezuela about long-term ethanol export contracts.
However, Japanese officials have delayed sealing any deals just yet, as they wait for more guarantees that Brazil - the world's largest ethanol exporter - will be able to furnish the biofuel without weather hitches or supply problems.
If a contract is closed, however, it would be a lucrative one for Brazil. Petrobras has estimated that Japan could import between 1.8 billion to 6 billion liters of ethanol a year, depending on whether the government mandates a 3% to 10% mix of ethanol in its gasoline.
By contrast, Brazil exported a total of 3.4 billion liters in 2006, of which less than 7%, or 225.4 million liters, went to Japan, according to Agricultural Ministry data.
A year ago, Petrobras set up a joint venture with state-owned Japanese firm Nippon Alcohol Hanbai to export ethanol. The new company, Brazil-Japan Ethanol Co. serves as Petrobras' agency in Japan.
In addition, the Brazilian oil company, which has also signed memos of cooperation with Mitsui, is mulling a possible project to build an ethanol-dedicated pipeline from Brazil's center-south state of Goias to the country's No. 1 sugarcane state of Sao Paulo, also to supply ethanol to Japan.
Many Brazilian sugarcane millers, however, remain wary of Petrobras' role in the country's industry, pointing out that they fear the oil giant may charge extra ethanol transportation costs for use of the pipeline, or otherwise come to dominate the highly fragmented and traditionally family-run sector.
Brazil is the world's No. 1 sugar producer and exporter. It is also theworld's No. 2 ethanol producer after the U.S.
Source: Grace Fan; Dow Jones Newswires; 5511 3145 1489; brazil@dowjones.com |
