Petrobras Seeks to Stem Fuel Losses by Adding Ethanol

Bloomberg

By Mario Sergio Lima - Jul 6, 2012 9:42 AM CT
Petroleo Brasileiro SA (PETR4) plans to stem losses from fuel imports using cheaper Brazilian-made biofuels as analysts forecast profit will decline to an eight-year low.

Petrobras, as the company is known, is asking the government to let it mix more sugarcane-based ethanol into its gasoline, two officials with knowledge of the discussions, who asked not to be identified because the matter isn’t public, said June 29. The move would help halt losses estimated at $375 million as refinery shortages force the company to import fuel.

Chief Executive Officer Maria das Gracas Foster obtained permission from the government, which controls Petrobras’s board, for a fuel price increase on June 15 to reduce the discount to international prices. She started meeting last month with analysts and investors in Rio de Janeiro, New York and London to explain how the company will fund $236.5 billion of investments over five years and more than double oil production by 2020.

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