Should Venezuela participate in the Abreu y Lima refinery?
A few days ago, Petrobras and PDVSA announced they had come to an agreement on forming a company to construct and operate a refinery in Brazil. The refinery, whose construction has already started, is situated in Pernambuco State in the north east and named Abreu y Lima after the hero of independence who was born in Recife. The refinery, with a capacity of 230,000 barrels per day, will process heavy crude to be supplied in equal parts by both companies and be geared to maximising the production of diesel for the local market. Petrobras will have 60% and PDVSA 40% of the shares. The two companies have been discussing the proposed deal since 2005. Why has it taken so long to reach an agreement? The reason is neither party really wanted to go ahead and have only done so after having been obliged by Presidents Lula and Chávez. The latter are pleased with the agreement which they say is an important achievement for South American energy integration. One cannot question the presidents’ right
