Petrobras, China Sign $10 billion Deal

June 2009 Vol. 236 No. 6

Petrobras has completed negotiations with the China Development Bank (CDB) for a 10-year bilateral credit line worth $10 billion.

The fund-raising opportunity resulted from the cooperation plan promoted between the Brazilian and Chinese governments, according to a news release from Petrobras.

The loan will be used to fund Petrobras' investments and includes funding for the purchase of goods and services from Chinese companies. The loan agreement signed on May 19 with CDB includes an increase in the current oil exports from Brazil to China. A long-term export agreement between Petrobras and Unipec Asia, a Sinopec subsidiary, was also foreseen. The agreement calls for a sales volume of 150,000 barrels of oil per day during the first year and 200,000 barrels of oil per day in the subsequent nine years.

Additionally, a memorandum of understandings (MOU) was signed between Petrobras and Sinopec for cooperation in several segments of mutual interest, including exploration, refining, petrochemicals, and the supply of goods and services.