On Tuesday, Petrobras announced its intentions to sell its oil refinery plant in Pasadena, Texas. The plant is a prime example of how corruption and poor administration have resulted in the near ruin of Brazil’s giant state-owned oil and gas company.
In 2006, Petrobras closed a USD 360 million deal to purchase 50 percent of the Pasadena refinery. The plan was simple and apparently logical: the Brazilian company would buy an obsolete (and thus cheap) refinery, revamp it, and adapt it to Brazil’s oil production. At a time when Brazil’s fuel consumption was down – and the U.S.’s was off the charts – it made sense on paper.
Yet it turned out to be what was arguably Petrobras’ worst deal. Ever.