Brazil's Petrobras buys part of Exxon's Chile unit

SAO PAULO: Brazil's state-run oil company announced a deal on Friday to buy Exxon Mobil's fuel distribution operations in Chile, continuing its expansion across Latin American energy markets.

Petroleo Brasileiro SA said it will pay US$400 million to takeover Exxon's Chilean retail, industrial and aviation fuel businesses by June 2009, giving the Brazilian company control of 16 percent of Chile's retail fuel market.

Exxon Mobil last year sold about 134,000 cubic meters of fuel to the three sectors, sending 55 percent of that to retail outlets and gas stations, Petrobras said in a statement.

The deal means that Petrobras will acquire 230 Chilean service stations from Esso Chile Petrolifera and other Exxon affiliates, along with six fuel distribution terminals and 11 airport distribution and sales centers, helping to "consolidate" the company's presence in Latin American fuel markets, Petrobras said.

Exxon Mobile Corp will keep its chemical, lubricant and specialty businesses in Chile, Petrobras said. A statement emailed from Exxon's South America spokesman confirmed the deal.

Petrobras, one of the world' biggest oil companies, exported US$1.5 billion worth of oil, natural gas and oil products to Chile last year. It also runs a network of nearly 1,000 service stations service stations in Argentina, Colombia, Paraguay and Uruguay, and supplies more than 80 percent of retail fuel sold in Brazil.

Exxon in April sold its Brazilian distribution centers and service stations to Cosan SA Industria e Comercio, Brazil's largest sugar and ethanol producer, for US$826 million.

By law, fuel sold at service stations in Brazil must be a 75-25 percent blend of gasoline and ethanol. Service stations also sell pure ethanol. Petrobras produces gasoline and disributes ethanol produced by large sugar plantations owned by individuals and corporations.

Exxon Mobil's shares rose 1.65 percent to close at US$78.72 on the New York Stock exchange. US-traded shares of Petrobras fell dropped 2.01 percent to close at US$51.06 in New York.