Petrobras signs memoranda of understanding with Portuguese companies

28/10/2008

Petrobras, Galp Energia, and EDP Energias do Brasil will sign memoranda of understanding in the biofuel, natural gas, electric energy generation, and exploration and production areas today (10/28). The documents will be signed in Salvador (State of Bahia), during the 9th Brazil-Portugal Summit Meeting. The event will be attended by the president of the Republic, Luiz Inácio Lula da Silva, and the prime minister of Portugal, José Sócrates.

The presidents of Petrobras, José Sergio Gabrielli de Azevedo, of Galp, Manuel Ferreira de Oliveira, and of EDP Energias do Brasil, Antônio Pita de Abreu will also be present.

Petrobras Biocombustível, Galp Energia, and the Government of the State of Bahia will cut a deal to study the feasibility of deploying a pole in Bahia to produce palm (dende) oil and sunflower seed oil, feedstock used for biodiesel production.

The memorandum is a breakdown of the Investment Agreement signed last October 10 between Petrobras and Galp Energia, in Lisbon, to form a joint-venture aimed at developing a biodiesel production project.

The project that is under analysis is divided into two phases, each of which calling for the annual production of 300,000 tons of vegetable oil in Brazil and 250,000 tons of second generation biodiesel, half in Portugal and the other half at a location yet to be defined. The company’s joint stock will be shared by Petrobras (50%) and Galp Energia (50%).

The parts involved in the project intend to deepen the studies to confirm the premises set forth by the Business Plan and to materialize the partnership to deploy the foreseen operations and activities.

In the gas and energy area, the document signed between Petrobras and EDP Energias do Brasil envisions the creation of partnerships to undertake studies to develop projects to generate energy using hydroelectric and eolian plants, in addition to thermoelectric plants fueled by natural gas and biomass, such as sugarcane bagasse. The memorandum of understandings will be in effect for two years. The agreement calls for the implementation of the projects approved by the two companies in their technical, commercial, and financial aspects.

Petrobras and Galp Energia will also sign a memorandum of understandings to assess the possibility to establish and/or maintain partnerships with Petrobras to allow Galp to perform as an operator in blocks located in shallow Campos, Santos, and Espírito Santo basin waters.

Petrobras press release