Petrobras boomtown turns desolate as refinery’s billions vanish

Sabrina Valle and Carlos Caminada – Yahoo Business, 05/04/2016

Located just 30 miles east of Rio de Janeiro’s bustling Copacabana beach, Itaborai looks like many oil boomtowns after the bust — except the deserted stores and empty glass towers that loom over this town of 220,000 speak of some bigger cataclysm than the collapse of crude prices.

“They said this would be the new oil city,” says Jefferson Costa, one of scores of migrants from Brazil’s impoverished north lured here by a multibillion-dollar petrochemical project that was supposed to create more than 100,000 jobs. Work on the complex, known as Comperj, has stopped, and unless new investors materialize, the single refinery now standing may never produce a single drop of fuel. “It’s empty inside,” says Costa, a plumber who lost his job six months ago when construction came to a halt. “People say it will become a large warehouse.”

Comperj has become a symbol of pervasive corruption at Brazil’s state-run oil producer, Petrobras. A sprawling investigation by federal police and prosecutors dubbed Operation Carwash has revealed massive graft, implicating construction conglomerates, banks, oil service providers, shipbuilders and politicians. About 2 percentage points of the 3.8 percent contraction in Brazil’s gross domestic product last year can be attributed to the effects of the scandal on the company and its suppliers, according to estimates from Tendencias, a consulting firm based in Sao Paulo.

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Infrastructure problems in Brazil: Equipment imported by Petrobras from Italy has been stuck in a port for over a month

Ricardo Geromel – Forbes, 09/23/2011

Talk to any economist about Brazil and you will hear that unless infrastructure and bureaucracy are deeply improved there is no way Brazil will be the “country of the future.”

Here is one example, first reported by Sabrina Lorenzi, that pinpoints why economists turned terms like infrastructure bottlenecks and bureaucracy into clichés when talking about Brazilian economy. Even Petrobras, the world’s eighth largest publicly traded company by Forbes, is largely affected by these hidden costs.

A reactor weighing one thousand tons, imported by Petrobras from Italy, has been “uselessly parked” for over a month at the Port of Rio. The optimist and competent decision makers at Petrobras did not plan to leave this reactor sitting at the port but since Rio de Janeiro highways do not support the weight of the equipment,well it is stuck there. Petrobras has been studying an alternative to transport the equipment by ferry to the Petrochemical Complex of Rio de Janeiro State (Comperj). It is the first of four reactors manufactured in Italy that will produce diesel in the refinery complex under construction in Itaboraí in the Metropolitan Region of Rio de Janeiro.

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