Brazil Supplies Oil to U.S. Bases in Japan, Inherits Exxon Deal

Brazil Supplies Oil to U.S. Bases in Japan, Inherits Exxon Deal

By Shigeru Sato and Yuji Okada
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April 10 (Bloomberg) -- Petroleo Brasileiro SA will supply jet fuel to U.S. military bases on Okinawa island, inheriting an Exxon Mobil Corp. agreement after it bought a refinery from the world's biggest oil company.

``We have no problem to maintain this contract,'' Jose Sergio Gabrielli, president of the state-owned company, known as Petrobras, said in an April 7 interview in Tokyo. He declined to say how much fuel will be supplied.

Petrobras this month paid $50 million for an 87.5 percent- stake in Nansei Sekiyu, the operator of the 100,000 barrel-a-day refinery, from Exxon unit TonenGeneral Sekiyu K.K. The acquisition comes at a time when jet fuel and gasoline prices have soared after crude oil touched a record $112.21 a barrel.

Beth Gosselin, a spokeswoman for Kadena Air Base in Okinawa, declined to comment when contacted by e-mail today, citing national security.

Petroleum use in Okinawa and its surrounding islands is about 40,000 barrels a day, according to the trade ministry. Fuel consumption in the Okinawa archipelago is just 1 percent of Japan's overall demand.

The U.S. government estimates the Kadena Air Base brings more than $700 million to the island's economy. Nearly 18,000 Americans and more than 4,000 Japanese work at the base.