Petrobras Magazine

Committed to becoming one of the five biggest integrated energy companies in the world, with a strong international presence, Petrobras purchased the Exxon fuel distribution assets in Chile, through associated companies, in August 2008. Now, having completed the control transfer of the companies, Petrobras is seeing to the gradual placement of the Petrobras logo in the service stations, which is scheduled to be completed in up to two years. The acquisition includes the retail, aviation, and industrial markets. Up to the present, US$400 million has been spent on the enterprise and an additional investment of US$ 90 million is foreseen. The main objective of the acquisition was the expansion of the company in South America.

The assets comprise 230 service stations, 109 of which operate on a franchise system and will have Spacio1 convenience stores; a fuel distribution and sales network in 11 airports; seven fuel distribution terminals, with four wholly owned and operated by Petrobras, two in joint ventures operated by third parties and one by the Empresa Nacional del Petroleo (ENAP); and participation in two logistics companies. These are joint ventures with Sociedade Nacional de Oleoductos, in which Petrobras holds a 22% stake, and Sociedad de Inversiones de Aviacion, in which the company’s stake is 33.3%.The chemical sectors, which includes lubricants and Mobil Exxon special products in Chile, are not included in the agreement.

“Petrobras wants to be important in Chile. This is part of the company’s strategy to consolidate its presence in South America. Entry into the country means a bigger market for the production of the company, which, with the discovery of giant fields in the pre-salt province, should become one of the major producing and refining companies in the world, generating production surpluses,” explains Jorge Zelada, Petrobras’ International Business Area director.

Before this enterprise, Petrobras was a minor player in the sale of lubricants and had a more significant role in supplying oil in Chile. In 2007, a cooperation agreement was signed between the company and Enap to identify opportunities for partnership in projects and businesses in all the sectors of the hydrocarbon and energy industries. Since then, an opportunity like this one for greater participation in Chile has been sought. Now, this desire has become a reality.

In 2007, Petrobras exported about US$ 1.5 billion in oil, LNG, petrochemical products, and lubricants to the Chilean capital. Now, thanks to the new acquisitions, the company is operating in a much more favorable situation in Chile. “Petrobras has become the third largest fuel distributor in the country and its participation in the retail and industrial markets is estimated at 16% and 17%, respectively. The responsibility is great because the level of competitiveness in retail and distribution is high in Chile, which has a stable economy, and consumers are demanding, since the services in the country work well. The experience, therefore, can prepare Petrobras for future entry into the US and European distribution markets,” according to the Petrobras coordinator of the Chilean take-over, Rodrigo Zavala.

Thanks to the acquisition of Esso assets in Chile, Petrobras now has distribution operations in five countries in South America – Argentina, where it has672 service stations; Paraguay, with 162 stations; Uruguay, where it owns 89 stations; Columbia, with 62 stations; and now Chile, with 230 service stations.

Some innovations will contribute to increasing business in Chile: “We will produce Lubrax lubricants in the country. We will supply petrochemical products to the local industries. In addition, as Petrobras plans to establish a bunker supply base in Chile, we will be able to supply fuel to the fishing vessels in the region, operating increasingly as an integrated energy company in Chile,” informs the Petrobras Chilean general manager, Vilson Reinchemback da Silva.

The expansion of the Petrobras presence in Chile is also introducing to the country the Petrobras Aviation logo already present in Paraguayan and Uruguayan airports. In this way, the company is strengthening its internationalization and is expanding the market for Petrobras Aviation’s products and services with commercial and executive aviation companies that use Chilean airports.

All this will take place with Petrobras in Chile making use of the entire labor force previously employed by the acquired Exxon companies.

As can be seen, the Petrobras plans for Chile are optimistic. And, for their realization, market differentiation will be fundamental. “Our presence in the country will add value to our products and services. In return, Petrobras will commit to being a reliable supplier company, with quality products and services and cutting edge technology, which will seek profitability combined with social and environmental responsibility, and which will work for the development of Chile. This is our posture in the countries in which we operate throughout the world. This is our differential,” concludes Vilson Reichemback da Silva.