BRAZIL CANCELS OIL PURCHASE FROM SAUDI ARABIA
Brazil's state-oil company,
Petrobras, cancelled a 40 mln dlr crude oil purchase from Saudi
Arabia after the Saudis refused to accept credit guarantees
from the Bank of Brazil, a Petrobras official said.
    Export director Carlos Santana told a press conference the
Saudis were the first suppliers of oil to impose such
conditions after Brazil's decision to halt interest payment of
its commercial debts last month.
    The shipment of 2.2 mln barrels represents two days of oil
consumption in Brazil.
    But Santana said if the Saudis change their minds and
decide to respect the terms of the contract, then Petrobras
will lift the order to cancel the shipment.
    Santana said if the Saudis do not accept Brazil's terms by
Monday then Petrobras will negotiate elsewhere.
    "Petrobras has been Saudi Arabia's traditional client since
1955. If they do not accept our conditions now, it will be much
better for us, because with the market prices more or less the
same, buying from Iraq and China is an advantage," he said.
    Iraq and China have barter deals with Brazil, importing
Brazilian goods in exchange for oil, but the Saudis buy nothing
from Brazil, he said.
    Santana said despite a strike threat by oil industry
workers and a two-week stoppage by Brazilian seamen, Petrobras
oil stocks are "reasonably balanced." 
    Saudi Arabia is Brazil's second biggest oil supplier, with
an average 115,000 bpd. Iraq is the main supplier with 235,000
bpd. China comes third, with 58,000 bpd.
    "If the Saudis wish to stop our trade relationship, fine, I
am sure that if they do, we will be getting dozens of offers
from elsewhere," Santana added.
 Reuter
