Brazil's president to sign 'voluminous loan' deal with China
Brazil's President Luiz Inacio Lula da Silva is to sign a financing agreement for state-run Petroleo Brazileiro SA (Petrobras) on a visit to China next week, a senior official said.
OGJ Oil Diplomacy Editor
LOS ANGELES, May 15 -- Brazil's President Luiz Inacio Lula da Silva is to sign a financing agreement for state-run Petroleo Brazileiro SA (Petrobras) on a visit to China next week, a senior official said.
Brazil's Energy Minister Edison Lobao told his country's state media that Lula, whose visit to China starts on May 18, will sign a "voluminous loan" deal on behalf of Petrobras.
Lobao did not detail the amount of the loan, but separate reports said that the agenda during Lula's visit includes discussion of a $10 billion financing package agreed under a memorandum of understanding signed in February by Petrobras and the China Development Bank.
Petrobras Chief Executive Officer Jose Sergio Gabrielli, who was expected to accompany Lula on the journey to China, earlier this month told state media that the Brazilian firm would soon finalize the agreement with China to finance subsalt oil development offshore Brazil.
Petrobras is open to having Chinese state-owned oil companies take equity stakes in oil exploration and production in Brazil as part of a package deal involving the $10 billion in financing, according to a report by Dow Jones Chinese Financial Wire.
A person familiar with the situation told DJCFW that Petrobras is now in talks with four Chinese companies about possible equity stakes and also on the volumes of crude oil Brazil would supply as part of a credit-for-oil deal they hope will be ready by early next week, when Lula visits China.
As part of the Brazil-China outline agreement in February, Petrobras is to sell China Petrochemical Corp. (Sinopec), 60,000-100,000 b/d of heavy crude oil as part of the credit deal.
However, accord to the DJCFW report, the discussions have been expanded to include possible sales of up to 200,000 b/d, with four other Chinese companies brought into the equation.
The four Chinese firms in the talks to buy 100,000-200,000 b/d of heavy crude are PetroChina Co.'s Chinaoil, Sinopec's Unipec, Sinochem Corp., and Zhuhai Zhenrong.
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