Petrobras, Braskem naphtha negotiations persist

OREANDA-NEWS. December 18, 2015. Brazil's state-controlled oil firm Petrobras has failed to yet reach a long-term naphtha contract with domestic petrochemicals producer Braskem.

Both companies agreed last month to a 45-day extension of the current naphtha supply contract as they continued to negotiate a deal. Petrobras' announcement on Tuesday did not specify the timeline for another extension, stating that "facts deemed relevant will be disclosed to the market in a timely manner." Petrobras reiterated that supplies of the feedstock will not be interrupted until a final agreement is reached.

Negotiations between the two companies have been continuing since the previous contract expired in early 2014. The naphtha price could be adjusted retroactively once they agree on a contract.

Braskem depends on Petrobras for 70pc of its naphtha requirements and imports the rest from other suppliers. Braskem cannot import a greater percentage of its naphtha demand because of logistical constraints.