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GE Oil & Gas Unit in Talks to Build Plant at Batista’s Acu Port
Posted on May 24, 2012
General Electric Co. (GE) is in talks with EBX Group Co. Ltd. to build a plant at Superporto do Acu, the port controlled by Brazilian billionaire Eike Batista in the state of Rio de Janeiro, and may make a decision this year.
“Once we reach a positive consensus for both companies, we can move forward,” said Joao Geraldo Ferreira, GE Oil & Gas’s Chief Executive Officer for Latin America, in an interview at Bloomberg’s office in Sao Paulo on May 21. “It would make sense from the point of view of establishing a bigger operation in Brazil, continuing the commercial ties that already exist with the group.”
GE hasn’t decided which types of service or equipment to produce at the new plant or the amount to be invested, he said.
GE’s oil and gas unit plans to invest $194.5 million this year to revamp and boost capacity at its three existing plants in the states of Sao Paulo and Rio de Janeiro, according to Ferreira. Latin America is “very promising” for oil and gas exploration and production, with Brazil accounting for most of GE Oil & Gas’s revenue in the region, he said.
The company’s revenue in Latin America is expected to grow by a double-digit percentage this year and by more than the market average, Ferreira said, without disclosing any numbers.
LLX Logistica SA, Batista’s port operator, is in “preliminary negotiations” for new letting contracts in its Superporto do Acu and hasn’t signed any definitive agreements yet, the company said in a regulatory filing on May 17.
Americas’ Biggest Port
LLX already has five letting contracts for the port, including agreements with NKT Flexibles I/S and Technip SA’s Brazilian unit, according to the filing. LLX expects total revenue from letting contracts at Acu of about 250 million reais ($123 million) by 2014, it said. Batista has said Acu will be the biggest port in the Americas and the third-biggest globally.
GE Oil & Gas has agreements to supply equipment to Batista’s oil company OGX Petroleo & Gas Participacoes SA, according to a regulatory filing on May 14. Shipbuilder OSX Brasil SA, also controlled by Batista, is among GE Oil & Gas’s clients, Ferreira said.
To contact the reporter on this story: Katerina Petroff in Sao Paulo at kpetroff@bloomberg.net
To contact the editor responsible for this story: Helder Marinho at hmarinho@bloomberg.net