Chevron completes purchase of Houston-area refinery from Brazil's Petrobras

HOUSTON (Reuters) - Chevron Corp completed a $350 million purchase of a refinery in the Houston suburb of Pasadena, Texas, from Brazil’s national oil company, Petrobras, Chevron said in a statement.

FILE PHOTO: A Chevron gas station sign is seen in Del Mar, California, in this April 25, 2013 file photo. REUTERS/Mike Blake

The sale was agreed to in January, but Chevron put the transfer of the 112,229-barrel-per-day plant’s ownership on hold on April 2, telling Petrobras it had to prove the refinery would operate as promised, sources told Reuters.

The Pasadena refinery is the second on the U.S. Gulf Coast for Chevron, which is based in San Ramon, California.

Chevron wanted the refinery to process sweet crude coming from its oil fields in the Permian Basin of Texas.

“This acquisition builds on the strength of our existing Gulf Coast business, enabling us to supply more of our retail market in the region with Chevron-produced products, and positions us for connectivity to our strong upstream assets in the Permian Basin,” said Mark Nelson, Chevron’s executive vice president for downstream and chemicals.

In addition to the refinery, Chevron acquired PRSI, a Petrobras subsidiary that operates the refinery and owns subsidiary PRSI Trading, which trades in crude and refined products markets. PRSI owns a 5.1-million-barrel storage tank farm and an additional 143 acres (58 hectares) of land along the Houston Ship Channel.

Chevron also operates a 352,000-bpd refinery in Pascagoula, Mississippi.

The Pasadena refinery was at the center of several investigations in Brazil of corruption within Petrobras.

The Brazilian oil company paid $360 million for half of the Pasadena refinery in 2006, more than eight times what its previous owner, Astra Oil, a unit of Belgian-controlled Astra Transcor Energy, paid for the complex a year earlier.

By 2012, Petrobras had sunk $1.18 billion into it, including the cost of buying out Astra’s remaining half after a legal dispute with Astra.

Reporting by Erwin Seba; Editing by Peter Cooney