$2.5 billion in biofuels until 2015

Petrobras, through its wholly-owned subsidiary Petrobras Biocombustível, will invest $2.5 billion in increasing biodiesel and ethanol production between 2011 and 2015.

This amount is part of the $4.1 billion earmarked for the biofuels business, which also foresees $1.3 billion for ethanol logistics and $300 million for research in this segment. Petrobras’ Business Plan calls for total investments in the order of $224.7 billion in the next five years.

Increasing ethanol production will be a priority, and get a total of $1.9 billion of the investments (76% of the amount set aside for production). Together with partners, the goal is to reach a volume of 5.6 billion liters in 2015, or a 12% national market share. This will ensure the company the leading position in the domestic market.

About 70% of the investments made in ethanol will be used to produce "new ethanol," with the construction of new plants, distilleries, increased sugarcane crushing capacity and plantation renewal. The investments will be made primarily through existing partnerships with Guarani, Nova Fronteira and Total Agroindústria Canavieira.

So far as the biodiesel and agricultural supply segments are concerned, which are expected to get some $600 million in investments, the company hopes to maintain a 25% domestic market share in the coming years. This figure takes into account the organic growth in demand for diesel and the B5 regulation going into effect (5% biodiesel added to diesel).

With its recent acquisition of a 50% interest in BSBIOS, in Passo Fundo, Petrobras Biocombustível's industrial park now adds up to five plants with a total capacity to produce about 700 million liters of biodiesel per year. The company will focus its efforts on undertakings in the State of Pará. These ventures include the Pará project, which will deploy a plant to supply Northern Brazil, and the Belém project, conceived to produce green diesel in Portugal in partnership with Portuguese company Galp. Currently generating 861 jobs and implementing their agribusiness operations, the two projects involve total investments of R$884 million.

In the biofuels research area, meanwhile, $300 million will be invested in advancing the development of second generation ethanol (cellulosic ethanol) with a view to industrial-scale production. Investments will also be increased in research into aviation biofuels and to improve production processes to keep the company at the forefront of sustainability.