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Petrobras foreign capex to top US$2.8bn

Bnamericas
Brazil's federal energy company Petrobras (NYSE: PBR) plans to spend 8.17bn reais (US$2.81bn), or 33.6% of its 24.3bn reais capex budget for 2004 on foreign projects, business daily Valor Economico reported. Foreign expenditures include the installation of new industrial units, increase in oil exploration and production, the acquisition of equipment for oil and gas projects, and in the conversion of ship and platforms into production units. Much of the foreign investment will actually be made in Brazil. Because of limits on the federal government's primary surplus target, which includes the debt levels of state-owned companies, the oil giant will use foreign subsidiaries to make investments benefiting Brazilian production. Petrobras' Netherlands division, for example, will be responsible for contracting converted ships and platforms made in Brazilian shipyards. Petrobras benefits from tax exemptions for the exported products and re-imports the capital good on a temporary basis without having to pay tariffs. President Luiz Inacio Lula da Silva encouraged Petrobras to become more aggressive at the international level. "Petrobras needs to be not only more ambitious internally, but also to prospect a lot in abroad in order to have importance in global oil trade," he was quoted as saying.

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