Sources: Petrobras is in discussions with Raizen, BP, and Inpasa about a joint venture for ethanol

Two sources familiar with the matter said that Brazilian state-run Petrobras was in discussions with Raizen, BP, and Inpasa about a potential joint venture for ethanol.

Earlier that day, Petrobras' director of energy transformation, Mauricio tolmasquim, told reporters that the company was investigating a joint venture for ethanol. He did not name the companies with which it might partner.

Petrobras Raizen BP Inpasa and BP did not respond immediately to comments.

Tolmasquim said that Petrobras plans to invest $2.2 billion over the next five-year period in ethanol distilleries.

Petrobras is still deciding whether to focus on corn-ethanol or sugarcane-ethanol, said the official.

Tolmasquim, speaking at a press event to unveil the $111 billion strategic plan of the company for 2025-2029, said: "The idea is not to start from scratch. It's to start big."

Tolmasquim did not give a date when the deal would be completed.

Magda Chambriard, CEO of Petrobras, told reporters that she did not see any reason why the company should be out the ethanol market, since it was the main competitor for gasoline, which is a fossil fuel that will lose its share on the market, according to Petrobras.

Chambriard said that the company's capital expenditures and production have been within their guidance since August.

Petrobras, which had previously planned to invest $18.5 billion in this year, has now reduced its investment plans for the year to between $13.5 and $14.5 billion.

Chambriard said, "We are expanding in all segments. We have many projects."

(source: Reuters)