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Petroleum industry

Petrobras Aims to Export 320 Million Liters of Ethanol in 2006 and 3.5 Billion Liters by 2011

Strategic Insights

— 1 min read

Petrobras, Brazil's state-run oil firm, is poised to become a major player in the global ethanol market, with plans to export 320 million liters of the biofuel in 2006 and a staggering 3.5 billion liters by 2011. The company's ambitious export plans are driven by a rapidly increasing domestic demand for ethanol, fueled by the growing adoption of flex-fuel motors in Brazil's car market. However, Petrobras' efforts may be hindered by the rapid expansion of sugar cane planting areas and ethanol mills by Brazilian producers, which may render the company's exports plans challenging.

Key Takeaways:

  • Petrobras plans to export 320 million liters of ethanol in 2006, with 150 million liters destined for Venezuela and 100 million liters for Nigeria.
  • The company aims to export 3.5 billion liters of ethanol by 2011, as part of its 2007-2011 business plan.
  • Petrobras will invest in building the world's first ethanol-only pipelines from central Brazilian producing regions to the coast to complement its ethanol transport network with river transport.
  • The company has set a target to expand its business in the ethanol sector, but growth depends on sales of the product abroad and the execution of the transport logistics plan in Brazil.
  • Brazilian ethanol producers are rapidly expanding sugar cane planting areas and ethanol mills, which may pose a challenge to Petrobras' exports plans.
  • The growing adoption of flex-fuel motors in Brazil's car market is driving a surge in domestic demand for ethanol.

Statistics:

  • 320 million liters of ethanol planned for export in 2006.
  • 150 million liters of ethanol to be exported to Venezuela in 2006.
  • 100 million liters of ethanol to be exported to Nigeria in 2006.
  • 850 million liters of ethanol planned for export in 2007.
  • 3.5 billion liters of ethanol planned for export by 2011.
  • 27% of Brazil's car market equipped with flex-fuel motors in 2006.

Sources:

  • Dow Jones Commodities News via Comtex, July 6, 2006.
  • Petrobras, 2007-2011 business plan.

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