OGJ Oil Diplomacy Editor
LOS ANGELES, Nov. 5 -- Brazil’s state-owned oil and gas company Petroleo Brasileiro SA (Petrobras) has signed the final agreements with China Development Bank Corp. (CDB) for a $10 billion loan, which has been under negotiation since May.
Petrobras Chief Financial Officer Almir Barbassa, who represented the firm in the signing ceremony, said, “This funding is relevant not only due to the amounts involved, but also because it represents a new phase of relationship between developing countries.”
The initial 10-year loan agreement was signed in May on the second day of a 3-day visit to Beijing by Brazil’s President Luiz Inacio Lula da Silva between state visits to Saudi Arabia and Turkey (OGJ, May 25, 2009, p. 35). Since then, the two sides have been negotiating the fine details.
Petrobras will use the loan for its 2009-13 business plan. The loan will be received in several tranches, according to withdrawal notices to be issued by the Brazilian firm in the upcoming months.
Petrobras said the CDBC funds also will be used to fund part of its $174.4 billion export plan during 2009-13, an amount that is 55.2% greater than the 5-year plan ending in 2012 and the largest in the company's history.
Petrobras said it will give preference to Chinese companies in using the loan for the purchase of goods and services and also said it will pay back part of the loan with proceeds from the sale of oil to China.
A long-term exports agreement between Petrobras and Unipec Asia, a wholly owned subsidiary of Sinopec, will begin with the first withdrawal notice to be issued by Petrobras in the CDB loan.
That agreement calls for an export volume of 150,000 b/d of oil during the first year and 200,000 b/d in the following 9 years.
Petrobras said although the CDB loan is a “trigger” to the exports agreement, “the agreements are independent and do not represent a securitization structure.”
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Petrobras signs $10 billion loan with CDB