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LATIN AMERICA |
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Petrobras Signs $10 Billion Loan Deal with
China
RIO DE JANEIRO – Brazilian state-controlled
energy giant Petrobras said Wednesday it has
signed a contract finalizing an historic
10-year, $10 billion loan from China
Development Bank Corp, the biggest-ever
financing deal between a Chinese entity and
a Brazilian company or institution.
“This funding is relevant not only due to
the amounts involved, but also because it
represents a new phase of relationship
between developing countries,” Petrobras CFO
Almir Barbassa said in a statement.
The executive represented Petrobras at the
signing ceremony on Tuesday in Beijing, the
statement read.
Negotiators had been hammering out the terms
of the financing deal since May, when it was
first announced during President Luiz Inacio
Lula da Silva’s visit to China.
Petrobras said it will give preference to
Chinese companies in using the loan for the
purchase of goods and services and also
announced it will pay back part of the loan
with proceeds from the sale of oil to China.
The Brazilian oil firm will increase its
sale of crude to Unipec Asia, a unit of
Chinese state oil company Sinopec, to
150,000 barrels per day in the first year of
the agreement and up to 200,000 bpd during
the subsequent nine years.
When Petrobras makes the first disbursement
of funds from the CDB loan, the long-term
agreement on oil exports to Unipec Asia also
will go into effect, the Brazilian oil giant
said.
The company said that even though the loan
is a “trigger” for the export agreement the
two deals are independent and Brazil’s oil
should not be considered as collateral for
the financing arrangement.
Petrobras also said the CDB funds will be
used to fund part of its $174.4 billion
export plan for the 2009-2013 period, an
amount that is 55.2 percent higher than that
of the five-year plan ending in 2012 and the
largest in the company’s history.
Petrobras says the investment will allow the
company to increase its output from 2.4
million barrels per day of oil equivalent in
2008 to up to 3.6 million boe in 2013 and up
to 5.7 million boe in 2020.
The 2009-2013 plan includes roughly $29
billion for the first phase of development
in the pre-salt region, a massive new,
offshore oil frontier that is so-named
because the estimated 80 billion barrels of
oil equivalent it may contain are located
deep below the ocean floor under an unstable
layer of salt.
If the most optimistic estimates prove
correct, the pre-salt deposits could
translate into a nearly six-fold increase in
Brazil’s current proven reserves of 14
billion barrels and transform the South
American nation into a major oil power.
But accessing them will be very costly and
pose an enormous technical challenge
because, among other things, it will require
boring through a shifting layer of salt that
is as much as a mile thick in some places.
Petrobras, an integrated energy company and
the global leader in deepwater oil
exploration and production, operates in 27
countries in the Americas, Africa, Asia and
Europe.
Shares of Petrobras, Brazil’s largest
corporation, trade on the Sao Paulo, New
York, Madrid and Buenos Aires stock
exchanges, but the Brazilian government
retains control through a golden share. EFE
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