Amendment by Petrobas to Braskem's naphtha supply contract worth US$252 mln

10-Nov-15

Brazil's state-run oil company Petroleo Brasileiro SA has announced two amendments to its contract to supply naphtha to Braskem SA, Latin America's largest petrochemical company are worth 950 million reais (US$252 million), as per Reuters. The contract amendments extend the terms of an agreement for Petrobras to supply Braskem with naphtha, to Braskem operations in the Brazilian states of Sao Paulo, Bahia and Rio Grande do Sul for 45 days starting Nov 1. Petrobras maintains discussions with Braskem, seeking in these talks a naphtha price that reflects balanced commercial and exchange conditions for both companies, referencing international market prices for petroleum derivatives," Petrobras said in a statement. Petrobras and Braskem have been negotiating a multi-billion-dollar naphtha-supply contract for months. A lack of a final agreement has led to a series of temporary extension agreements. Braskem, with 36 plants, 29 in Brazil and the rest abroad, including factories in the United States and Germany, is controlled by Brazil's Odebrecht Group. Odebrecht is one of about two dozen construction and industrial companies involved in a giant price-fixing, bribery and political kickback scandal that has cost Petrobras and its government and non-government investors billions of dollars. Braskem depends on naphtha from Petrobras to operate its Brazilian plants, the dominant supplier of polyethylene, polypropylene and poly-vinyl-chloride (PVC) to Brazil, the world's seventh-largest economy.