Petrobras already has extensive refining capacity of roughly 2 million barrels per day, thanks to its 14 refineries in Brazil, Argentina, and Texas (see Table 1). But the company continues to be a net importer of crude and refined products. During the first quarter, the company imported about 52.7 MMbbl of crude and derivatives while exporting 52.1 MMbbl. The difference puts an economic strain on Petrobras, as much of the imports consist of more expensive light crude for refineries, while exports tend to be cheaper heavier oil.

Petrobras had a negative trade balance during the first quarter, but that will likely disappear over the coming months as the massive discoveries in the Santos Basin begin coming onstream. By 2015 Petrobras aims to produce roughly 4.2 million barrels of oil equivalent per day, an increase of nearly 80 percent over current levels. And to take advantage of its heavy crude production at home, Petrobras has teamed up with Venezuela’s PDVSA to build the 200,000 bbl/d Abreu e Lima heavy crude refinery in Brazil’s Pernambuco State, which will be operational by 2010. And Petrobras is mulling construction of another refinery in Rio Grande do Norte State, although it has been quiet about details.