Petrobras (PBR) Fighting Criticism of Refinery Investment as Capacity Full

Brazilian oil giant Petrobras (NYSE:PBR) has reached the limits of its refining capacity and needs to invest in new refineries to keep pace with growing demand, the CEO of the state-controlled firm said here Monday.

"Not investing in refineries at this moment is long-term suicide. We must invest and it has to be now," Jose Sergio Gabrielli told a gathering of business executives in Rio de Janeiro.

He was responding to criticism of the large sums Petrobras is spending to expand its refining capacity.




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"We have a problem: we are at the limit of refining and with an exponential growth in petroleum production," the CEO said. While Petrobras has 11 refineries in Brazil, its total refining capacity - 1.9 million barrels per day - lags the company's median crude output of 2 million bpd.

The firm expects crude output to reach 3.9 million bpd by 2020, when refining capacity will be 3.2 million bpd, even with the three new refineries now under construction and two more in the planning stage, Gabrielli said.