The Rio de Janeiro Petrochemical Complex will process 150 thousand bpd of oil, as from 2012

Agreements and mergers forge alliances

Petrobras consolidated its presence in the petrochemical field, a strategic segment for the diversification of the product portfolio that gives the company’s oil and natural gas added value.

Centro de Integração do Comperj
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In June 2008, Petrobras, Petroquisa and Unipar brought together under the name Quattor Participações (originally Sociedade Petroquímica do Sudeste) all the assets relating to their investment agreement, representing: 75% of the total capital of Rio Polímeros, 76.6% of the total capital of Suzano Petroquímica, 77.2% of the total capital of Petroquímica União, 99.9% of the total capital of Polietilenos União, and all the property, rights and obligations relating to the operations of the UDQ (Unipar Chemical Division).

Quattor Participações became a subsidiary of Unipar, which holds 60% of the company’s voting and total capital. Petrobras holds the other 40% of the voting and total capital of Quattor Participações, which is distributed between Petrobras and Petroquisa (31.9% and 8.1%, respectively).

During 2008, Quattor Participações carried out Public Offerings (OPAs) for the shares of Quattor Petroquímica (formerly Suzano Petroquímica) and Petroquímica União, thereby increasing its stake in those companies. These operations led to the curtailment of Quattor Petroquímica’s adherence to the Bovespa Level 2 Corporate Governance Practices and the cancellation of Petroquímica União’s registration as a listed company.

At the end of 2008, Quattor Participações held 75% of the capital of Rio Polímeros, 99.3% of the capital of Quattor Petroquímica, 99.2% of the capital of Petroquímica União and 100% of the capital of Polietilenos União, as well as all the property, rights and obligations in relation to the UDQ operations.

ASSET CONSOLIDATION - On May 30th, the first phase was completed of the process of consolidating the petrochemical assets relating to the Investment Agreement signed on November 30, 2007 by Petrobras, Petroquisa, Odebrecht, Norquisa and Braskem and amended on May 14, 2008. During this phase, Petrobras and Petroquisa transferred to Braskem, through the fully-owned subsidiary Grust Holdings S.A., their stakes in various petrochemical assets: 36.5% of the total capital of Copesul; 40% of the total capital of Ipiranga Química S.A. (IQ) and Ipiranga Petroquímica S.A. (IPQ); and 40% of the total capital of Petroquímica Paulínia S.A. (PPSA). As a result of these operations, and the subsequent cancellation of the relevant treasury stock, Petrobras, together with Petroquisa, increased their stake in Braskem from 8.1% to 31% of the voting capital, and from 6.8% to 23.8% of the total capital.

In alignment with the Investment Agreement and the completion of the first phase of the consolidation process, Petrobras, Petroquisa, Odebrecht and Norquisa signed a new Braskem Shareholders’ Agreement, which extends the corporate governance model, allowing Petrobras a greater say in the decision making process, through the appointment of three members of the Board of Directors and representatives on all the Board advisory committees.

On September 30, Braskem completed an important stage in the consolidation of the Brazilian petrochemical sector, absorbing PPSA, IPQ and, indirectly, Copesul itself, which had merged with IPQ on September 11th. These mergers led to a simplification of the shareholder structure, made the company more competitive and strengthened the national petrochemical sector.

PROJECTS

RIO DE JANEIRO PETROCHEMICAL COMPLEX (COMPERJ) – As from 2012, the complex will process 150 thousand bpd of oil for the production of petrochemical raw materials and oil products. In addition to the basic petrochemical unit (UPB), utilities center and second generation units, Comperj will be equipped with a vocational training center, for businesses and workers, and a distribution center, for channeling liquid products to loading terminals in the Guanabara Bay area. The ground preparation is already under way.

PERNAMBUCO PETROCHEMICAL COMPANY (PETROQUÍMICASUAPE) – Citene, Petroquisa’s partner in the undertaking, declared in August that it intended to withdraw from the venture. So as not to compromise the operational start-up, forecast for 2010, in September Petroquisa purchased Citene’s stake, giving it 100% capital control. The construction and industrial assembly phases were initiated in 2008.

PERNAMBUCO INTEGRATED TEXTILE COMPANY (CITEPE) – Petroquisa acquired Citene’s stake in the venture, thereby assuming full capital control. The negotiations for acquisition of the most important imported equipment have been completed and the ground preparation is proceeding.

With Petroquisa’s acquisition of Citene’s stakes in the companies PetroquímicaSuape and Citepe, the opportunity arose to integrate these two projects and incorporate a PET bottle grade unit. Negotiations are in course to bring another partner into this integrated undertaking.

COQUEPAR – In partnership with Brazil Energy and Unimetal, Petrobras will build two petroleum coke calcination units, one in Rio de Janeiro and the other in Paraná, thus adding value to its production of ‘green’ coke. The combined production capacity will be 700 thousand tons/year.

FERTILIZERS

Petrobras held onto its lead in the domestic urea and ammonia market, in 2008, with sales of around 650 thousand tons of urea and 200 thousand of ammonia, produced at its two plants. Commercialization of the two products generated gross revenue of more than R$ 1 billion, well above the R$ 840 million recorded in 2007.

The nitrogenated fertilizer plant in Bahia (Fafen- BA) attained its highest production level in nine years, turning out 300 thousand tons of urea, while the output of the nitrogenated fertilizer plant in Sergipe (Fafen-SE) exceeded 400 thousand tons of urea.

With regard to new projects, feasibility studies are being carried out for a urea and ammonia plant (UFN-3) and a nitric acid plant in Bahia. The UFN-3 will have the capacity to produce 1 million tons of urea and 760 thousand tons a year, using gas as a raw material. The Bahia plant is expected to produce up to 120 thousand tons/year of nitric acid for the Camaçari Petrochemical Complex, and will involve the investment of about US$ 260 million