Petrobras cautious on Carabobo

Brazil's state oil company Petrobras will consider taking a bigger stake in Venezuela's heavy oil Carabobo project following the conclusion of studies over the next two months.

The statement comes after last week's meeting between Brazilian and Venezuelan leaders, where Brazilian President Luiz Inacio Lula da Silva appeared to insist on a larger participation by Petrobras of 40%, rather than the 10% stake it has stated it will take.

Studies on the costly Carabobo project will continue for two months, and if Petrobras gets assurances of adequate return it may take a bigger stake. If Petrobras refuses the 40% Carabobo stake, Venezuela's state oil firm PDVSA will hold a tender for the outstanding participation.

The Carabobo project is linked to a plan to build a $4 billion oil refinery in Brazil's northeast. Last Wednesday, Lula and Chavez agreed in principle that PDVSA would take a 40% stake there and Petrobras the remaining interest.

Reuters reported that a final contract has yet to be signed. Petrobras said the stakeholder agreement is preliminary.