Portugal’s Galp Energia and Brazil’s Petrobras consider investing in biofuel

21 May 2007

Lisbon, Portugal, 21 May – Portugal’s Galp Energia and Brazil’s Petrobras Friday signed a memorandum of understanding to set up a joint venture for the biofuels business, with the possibility of supplying Portugal with 300,000 tons of biodiesel per year.

The chief executive of Galp, Manuel Ferreira de Oliveira, and of Petrobras, Sérgio Gabrielli, said in a press conference after the signing of the memorandum, which will be set up after technical and economic feasibility studies and for the production, sale and distribution of vegetable oil and/or biofuels.

The negotiations are expected to be concluded by the end of July.

Ferreira de Oliveira said that the two companies would begin a study that could lead to a “material partnership” capable of producing 600,000 tons of biofuels per year.

Of those 600,000 tons, Ferreira de Oliveira said that 300,000 could be used to fulfil the needs of the Portuguese market, in order to meet the target of incorporating 10 percent of biofuel in the roads sector by 2010.

The other 300,000 tons are expected to be exported to the Europe, as Petrobras hopes to export to European market.

The companies gave no figures for investment in this project, and no information about how the business would be organized between the two companies.

The chairman of Petrobras said that this memorandum aimed to carry out studies to analyze “the conditions of production, processing, transport, market, partnership, supplier network and distriobutors.” (macauhub)