Petrobras Won't Adjust Domestic Oil Prices Amid Volatility

Date : 03/19/2011 @ 4:50PM
Source : Dow Jones News
Stock : Cosan Limited Class A (CZZ)
Quote : 9.15  0.0 (0.00%) @ 3:59PM

Petrobras Won't Adjust Domestic Oil Prices Amid Volatility

Cosan Limited Class A (NYSE:CZZ)
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Brazil's state-run oil giant Petrobras (PBR, PETR4.BR) won't alter prices it charges for oil products on the domestic market, given the current climate of global market volatility, the company's president said Saturday.

"We adjust our prices based on the long-term outlook," said Petrobras President Jose Sergio Gabrielli, on the sidelines of a Brasilia conference attended by visiting U.S. President Barack Obama. "When there's a lot of market volatility, like now, we don't adjust prices."

Gabrielli added that, in his view, the current nuclear energy crisis in Japan "will have no direct impact on oil prices."

Gabrielli also commented on President Obama's speech to the conference. Obama said the U.S. was anxious to supply technical assistance to Brazil as the South American country develops huge offshore oil reserves. Longer term, Obama said the U.S. would become a good customer for Brazilian oil.

Gabrielli said, "Yes, we are a potential future supplier. In fact, the U.S. is already our biggest customer." He added that the U.S. desire to become a strategic partner in Brazilian oil development was "something new" and worth examining.

Obama also underlined U.S. support for joint development with Brazil of renewable energy sources. The U.S. and Brazil are world leaders in development of ethanol, Brazil from sugarcane and the U.S. from corn.

But the ethanol cooperation horizon is clouded by a U.S. tax on Brazilian ethanol imports.

Brazilian executives at the Brasilia event expressed hope the Obama administration might become more aggressive in seeking to remove the trade barriers leveled against ethanol imports.

"Ethanol is a concern [in relations between the two countries] and I believe they will be more aggressive in removing the barriers which exist there," said Gabrielli.

Rubens Ometto, president of Brazilian sugar and ethanol giant Cosan SA (CSAN3.BR), said there was now "a greater expectation about changes." However, he added, "I don't know if that will happen. We are hopeful, but there are still no concrete developments."

-By Rorgerio Jelmayer, Dow Jones Newswires; 55-11-3544-7090;


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