Petrobras Deals With Anti-Inflation Efforts, Enbridge’s New Pipeline: Energy Business Review

Petrobras (NYSE:PBR) has come to loggerheads with the anti-inflation efforts of Brazilian President Dilma Rousseff, and has lost thus far in 2012 a record $8.4 billion at its refining division, as it both lacks capacity through which to satisfy demand, and because it is state-run it can not raise prices without permission. Accordingly, the company is forced to import gasoline — 65 percent of its needs — which ran to 84,000 barrels a day in the third quarter according to its earnings filings. Worse, Petrobras must then sell the imports at approximately 8 percent under cost.

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On Thursday, Enbridge (NYSE:ENB) announced that it will construct a pipeline with estimated costs at $1.8 billion, to transport 570,000 barrels of oil per day between Alberta’s two main storage hubs at Edmonton and Hardisty, to meet the soaring output from the oil sands. The pipeline will consist of 111 miles, through a 36-inch line that will carry crude from Edmonton to Hardisty, which is the head for Enbridge’s Alberta Clipper pipeline, which moves 796,000 barrels per day to Superior, Wisconsin, along with TransCanada Corporation’s (NYSE:TRP) Keystone pipeline and its planned Keystone XL line. It is anticipated that the oil sands projects in Northern Alberta will see their output almost double to 3.1 million barrels per day by 2020.

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