Petrobras, Conoco in ethanol cooperation deal

RIO DE JANEIRO, July 3 (Reuters) - Brazil's state-run oil company Petrobras (PETR4.SA)(PBR.N) and U.S. company ConocoPhillips (COP.N) on Thursday signed a cooperation agreement regarding sugarcane-based ethanol and petroleum.

Petrobras said in a statement the agreement envisages studies to strengthen both companies' positions in cane ethanol production and exports and in oil exploration, production, refining and trade.

"The agreement seeks to identify cooperation opportunities in the areas of ethanol, (oil) exploration and production, refining and trade of petroleum derivatives," Petrobras said.

The companies will evaluate possible partnerships for oil exploration and production in Brazil and abroad.

Paulo Roberto Costa, Petrobras downstream director, told Reuters earlier this year the company was willing to share, for a price, its expertise in pipelines that pump both ethanol and oil products with foreign companies that have approached it, including ConocoPhillips.

He said ConocoPhillips had mentioned certain problems with using pipelines for ethanol transportation in the United States. In exchange, Petrobras was interested in partnerships in oil exploration or information about oil blocks.

Petrobras has a multiuse pipeline that moves ethanol and other fuels linking its oil refinery of Paulinia in the interior of Sao Paulo to the coastal ports and the town of Senador Canhedo in the center-west state of Goias.

Petrobras also plans another ethanol pipeline in the center-south, which would run from the center-west state of Mato Grosso to the main grain port of Paranagua in Parana state.

The two pipelines are expected to tap into an export boom driven by Japanese demand for ethanol.

Brazil, the world's pioneer of mass ethanol usage in cars, has been mixing the sugar cane-based fuel with gasoline for decades, as well as running a vast fleet of vehicles on pure ethanol. Petrobras, an oil company, is still a small player on the ethanol market, but it seeks to become a major. (Reporting by Andrei Khalip; Editing by Christian Wiessner)