Pdvsa fails to get loan for Pernambuco refinery

State-run oil firm Petróleos de Venezuela, S.A. (Pdvsa) informed Brazilian state-owned oil company Petrobras that it failed to get a credit from the Brazilian National Development Bank (Bndes) to acquire a 40% share in an oil refinery under construction in Pernambuco, said Paulo Roberto Costa, the supply director of the Brazilian oil firm.

The executive said he received a letter from Pdvsa. However, he declined to comment on whether the Venezuelan company expressed its decision to abandon the project, Reuters reported. Costa added that Pdvsa did not request an extension to negotiate a new loan.

"We received a letter today and we are still examining its contents to see which way to go," Costa told reporters. "They (Pdvsa) say they are having problems with Bndes," he added.

Several delays in Pdvsa's participation led Petrobras to start construction of the refinery. The Brazilian government has built half of the project and the refinery is ready to process Brazilian oil from Marlim Field, Campos Basin, but not crude oil from the Carabobo oil block in the Orinoco Belt in Venezuela, as originally planned.

In order to process heavier oil from Venezuela, an additional investment of USD 300 million is required for a plant to reduce sulfur.

The refinery, launched in 2005, was presented as the cornerstone of cooperation between Venezuela and Brazil and an expression of solidarity between Venezuelan President Hugo Chavez and his then counterpart Luiz Inacio Lula da Silva.