Brazil refiner offers land to government to avoid expropriation

23 October 2012 00:30  [Source: ICIS news]

CAMPINAS, Brazil (ICIS)--Brazil-based refiner Refinaria de Petroleos de Manguinhos offered part of its property to the government of Rio de Janeiro state to avoid expropriation, it said on Monday.

If the deal is accepted, it would help Refinaria de Petroleos Manguinhos to proceed with a Brazilian reais (R) 1.4bn investments for the next four years, the company said.

As a result, it could increase its fuel storage capacity from 1.8m bbl to 6.5m bbl, it said.

Refinaria de Petroleos Manguinhos would sell part of its property for R350m ($172m, €132m), it said in a statement.

The offered property represents about 20% of the company's land, which is near downtown Rio de Janeiro and the city's port.

Earlier this month, the government of Rio de Janeiro state said it would expropriate the refinery to build public housing as part of a renovation project in communities that have sprung up around the plant.

As a result of the order, Manguinhos asked for trading of its shares to be suspended.

Refinaria de Petroleos de Manguinhos said it produces, commercialises and distributes the oil derivatives, working in the market through its subsidiary, Manguinhos Distributor.

According to the plant, it has a processing capacity of 15,000 bbl/day.

However, the state's governor, Sergio Cabral, said the refinery has been only stocking ethanol, according to the Brazilian newspaper O Globo.

The company declined to comment on the governor's statement.

($1 = R2.03)
($1 = €0.77)

By: Leo Siqueira
+1 713 525 2600

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