off-the-wire

UPDATE 1-CERAWEEK-Petrobras in favor of dialogue first, then fight on oil export tax

Kitco Media
By Reuters
Published:
Updated:
Reuters
(Adds information on LNG, quotes) By Marianna Parraga and Richard Valdmanis HOUSTON, March 8 (Reuters) - Brazil's state-controlled oil company Petrobras is in favor of dialogue first to convince the government to get rid of a recent tax on crude exports, then a fight if necessary, the company's Chief Executive Officer Jean Paul Prates said on Wednesday. The government announced last week it will tax crude oil exports from the South American country for four months to compensate for its decision to partially maintain a tax exemption on fuels. "I think that by dialoguing for the better solution, we might not have to fight," Prates told journalists at the CERAWeek energy conference in Houston. He did not explain how the country's energy associations would fight the tax, but said they are expected to take action. Executives from oil producing companies in Brazil


have complained that the measure was introduced suddenly , without previous dialogue.


Prates said Petrobras is more focused on domestic policies and negotiations than in the situation of the global oil market, as there will always be volatility. He said the current price oscillations and supply and demand imbalances happening are expected to end once the war in Ukraine ends.


Even with liquefied natural gas (LNG) supplies tight globally and Brazil's high need for imports, Petrobras is not interested in signing long-term supply contracts, Prates said.


"It's more likely that we have something short to mid term than long term because don't forget we have reserves offshore in our basins," he said, pointing out that they are planned to be developed for domestic use.


"We know that LNG in the Atlantic is a highly, highly heated market right now because of Europe," he said. However, "that should not be the base for the prices right now... It would be the worst time to do a contract like that."
(Reporting by Marianna Parraga and Richard Valdmanis; Editing by David Gregorio)

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