25 Aug 2009 - by PreSalt.com - Source: Petrobras News
This Tuesday’s session of Petrobras’ CPI heard depositions by the Pernambuco Refinery’s general manager for Project Implementation, Glauco Legatti, and by Petrobras’ manager for Cost Engineering and Term Estimates, Sérgio Arantes. Legatti presented technical details about the project to the senators and highlighted the differences in understanding there are between the Federal Court of Auditors (FCA) and Petrobras regarding the refinery’s costs. “There is no overpricing,” said the general manager.
Legatti highlighted the fact that the court used parameters set forth by the DNIT – used to build roads – and did not take the methodology the Company uses and the characteristics that are unique to the oil industry’s projects into account in its analyses. According to the manager, of the 12 questions the FCA brought up, Petrobras has already clarified six, while the others are under discussion with the court. “In fact, there are a few questions that do not include some of the characteristics that are unique to our type of construction and do not consider labor, overtime, training, and technical recommendations,” he said.
Legatti denied there is any error in the Pernambuco Refinery’s basic project and emphasized the project included all possibilities and items foreseen in the agreement. The exception was the expansive soil that was found at the site, which, according to the manager, was more widespread than initially foreseen in the basic engineering project. The technique used to deal with the major volume of expansive soil that exists there was presented to the senators, with the observation that it resulted in the most appropriate adjustments for the project, both economically and environmentally.
Exchange Variation
When questioned about the differences in the refinery’s construction budget, Legatti clarified that the first calculation, $4 billion, was made in the project’s conceptual phase. The manager showed the main factors that led to the change: equipment and product price surges in the international market, exchange variations, and project adjustments.
“This amount is being analyzed gradually and is currently at $12 billion. The exchange issue also includes the sulfur treatment unit, which was not foreseen in the initial project. This project is currently in its approval phase, and these figures will be part of an economic feasibility study process yet to be completed,” clarified Legatti. The general manager also highlighted the fact that budget negotiations have been being held with the consortium that won the bid since early 2008.
Petrobras manager for Cost Engineering and Term Estimates, Sérgio Arantes, mentioned the Company has been using the international methodology to procure products and equipment and to hire services for 30 years, and that it has been successful in previous projects.
According to Arantes, in major civil construction projects, it is normal for adjustments to be made during the process. He mentioned the need to hire qualified labor to reduce labor accidents as an example. “We are below the global accident levels. That is why we are concerned with hiring qualified staff,” he said.
Glauco Legatti emphasized that projects of the size of the Pernambuco Refinery have not been build in the past 30 years. According to the engineer, the refinery will supply Northeastern Brazil’s diesel fuel needs, since it will produce 230,000 barrels per day of five products: LPG, naphtha, diesel fuel, bunker and coke.
The engineer said 2,000 jobs were created in the earthwork phase, and that the project has 700 pieces of equipment in operation. The contracting project followed all of the company’s procedures, among which the national currency and the lowest total estimated value. According to Legatti, 10 companies were invited to bid, among which a consortium. The detailing projects and the earthwork have Petrobras and a consortium led by Odebrecht and composed of Camargo Correa, Queiroz Galvão and Galvão Engenharia, as contracting parties. The amount of the agreement that was signed was R$429 million and the project is foreseen to be completed in March 2010,” he said.
Legatti remarked that the choice of location resulted from a study carried out in 2005. One of the determining factors was the proximity to the sea, as this facilitates production outflow. The project foresees ducts through which the oil will be pumped directly from the vessel to the refinery which, in turn, will have its products transported through the same system, by this optimizing costs and energy. “This was the most appropriate position and the plot of land was even favorable insofar as a few issues are concerned. The refinery is going to allow for quite a bit of savings in the internal transference process. This is a project that seeks to work on energy conservation,” he said.
Glauco Legatti confirmed the 2011 forecast for the first refining by means of the distillation unit. According to the manager, a refinery goes on stream gradually, after a few units are already working with infrastructure support. Regarding cost increases, he reiterated that when prices are above the acceptability margin, the process is cancelled and renegotiated until an adequate price is reached. He also said Petrobras will forward the total amount of the refinery’s costs to the Congressional Investigation Commission.
Speaker Romero Jucá said the first hearing was held today regarding the Pernambuco Refinery’s construction. According to the senator, the documents have been available to the press and to the society over the Internet for 10 days and the Commission is open to receive suggestions of people who should be heard in the upcoming sessions. Federal Auditor Court technicians will be heard and the PINI Cost Schedule methodology, used by public and private contracting parties who want updated basic references in their bidding and budget assessment processes, analyzed next Tuesday. “We took the first step today, but other issues will be further investigated,” he said.
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