(Bloomberg) — The former head of Petroleo Brasileiro SA’s refining division is negotiating with a group of investors to build a shipyard in Brazil to repair vessels used by the world’s biggest deep water oil producer.

Paulo Roberto Costa, who left Petrobras in April as part of wider management changes by Chief Executive Officer Maria das Gracas Foster, plans to raise as much as 300 million reais ($147 million) from four investors to compete with repair yards in China, South Korea, Singapore and Japan, he said in an interview. One of the partners will be Sao Paulo-based merchant bank Brasilinvest Group, where Costa has set up a division for oil, natural gas and biofuels investments.

Brasilinvest and its partners are seeking to purchase land along Brazil’s coast to build the yard and two other facilities, one to build supply ships and another to manufacture equipment for floating production vessels, Costa said. The shipyard will benefit from a lack of competition in Brazil and by eliminating the 90-day round trip to yards in Asia, he said.

“We’ll economize huge times here,” Costa said yesterday at his office in Barra de Tijuca on the outskirts of Rio de Janeiro. “It’s a good market to do repairs in Brazil.”

Rising Costs

Petrobras, based in Rio, is investing $236.5 billion in the five years through 2016 to increase its fleet of drilling and production vessels and expand output of oil and refined products. Rising maintenance costs contributed to lower-than- expected profits at Petrobras in the third quarter, and delays in equipment deliveries have contributed to production declines this year.

The repair yard will also service vessels not used in the oil industry to expand its base of clients, Costa said. He declined to name the other partners at the yard because the new company hasn’t been formally established yet.

-By Peter Millard. Copyright 2012 Bloomberg.
 
Cover Photo via Shutterstock
 
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