April 7 (Bloomberg) -- Petroleo Brasileiro SA, Brazil's state-controlled oil company, will invest $15 billion on overseas oil projects, aiming to double its crude oil production to capture growing demand in Asia and South America.

The Rio de Janeiro-based company plans to expand its oil output to 4.15 million barrels a day by 2015 from the current 2 million barrels, Jose Sergio Gabrielli, president of Petroleo Brasileiro, known as Petrobras, told reporters in Tokyo today. The company will allocate $1.5 billion of the amount for renewable energy businesses, Gabrielli said.

Brazil is speeding up acquisitions of overseas refineries, oil exploration and construction of plants at home to capitalize on rising use of automotive fuels in Asia and South America. This month, Petrobras completed the purchase of an 87.5 percent stake in a Japanese refiner from TonenGeneral Sekiyu KK., a unit of Exxon Mobil Corp.

Gabrielli said his company plans a capital expenditure of 100 billion yen ($975 million) to upgrade the 100,000 barrel-a- day refinery on Japan's southern island of Okinawa. Sumitomo Corp., a Japanese trading house, owns 12.5 percent of Nansei Sekiyu K.K., the operator of the plant. The company aims to boost exports of the fuel from the refinery to Asian countries.

Okinawa Island

Japanese oil refiners have either shut or reduced the size of their plants in the past decade because energy conservation and a shrinking population slowed fuel demand in the world's second-largest economy. The refiners are expanding export capacities to benefit from demand in China, India and other Asian countries.

Petroleum use in Okinawa and its surrounding islands is about 40,000 barrels a day, according to data compiled by the trade ministry. That's equivalent to 40 percent of the current maximum capacity at the refinery. Fuel consumption in the Okinawa archipelago is just 1 percent of Japan's overall demand.

``Investment decision on the Okinawa refinery depends on the feasibility study we are conducting,'' Gabrielli said in an interview after the press conference in Tokyo. ``First we will optimize the refinery, and increase our oil processing to 50,000 barrels a day from the current range of 30,000 barrels and 35,000 barrels.''

Bio-ethanol Exports

Making use of existing storage terminals at the Okinawa refinery, Petrobras will export bio-ethanol to Japan and other Asian countries, as the region's demand for cleaner-burning automotive fuel is growing, he said.

Nansei Sekiyu owns tanks at the Okinawa refinery, with crude and oil-product capacity totaling 9.6 million barrels, according to data from Petrobras.

On March 28, Petrobras and its partners including Japan's Mitsui & Co. formed a company for the construction of an ethanol pipeline in the South American nation.

Under the project, the partners will extend the biofuel pipeline from Senador Canedo in Brazil's Midwestern state of Goias, to Paulinia, in the southeastern Sao Paulo state. The project is part of the so-called Ethanol Exports Corridor, which starts in Senador Canedo and goes through the southeastern states of Minas Gerais and Sao Paulo, Petrobras said.

Gabrielli held talks today with Japanese Trade Minister Akira Amari in Tokyo, and called on Japan to increase investment on industrial infrastructures in Brazil including ethanol production and chemical plants, Gabrielli said.

To contact the reporters on this story: Shigeru Sato in Tokyo at ssato10@bloomberg.net; Yuji Okada in Tokyo at yokada6@bloomberg.net

Last Updated: April 7, 2008 06:00 EDT