China, Brazil reach US$10-bln oil deal
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China has signed agreements with Brazil to lend US$10 billion to Brazil's Petrobras in return for a guaranteed crude oil supply throughout the next 10 years, according to Sinopec on Tuesday.
The three-party agreements were signed by China Development Bank (CDB), Petrobras and China's state oil firm Sinopec. The loan will come from CDB, and Petrobras will guarantee the supply of 200,000 barrels of oil a day to Sinopec for the next 10 years.
Petrobras and Sinopec also signed a memorandum of understanding on exploration, equipment and service supply. Meanwhile, Sinopec is negotiating with Petrobras to invest in their upstream projects.
China's increasing energy demand has strengthened its dependence on oil imports. The agreements, which have been brewing since last year, provide a guarantee for China's ongoing energy imports.
Sergio Gabrielli, president and CEO of Petrobras, said that the loan from CDB and other banks, US$30 billion in total, will be used for exploring marine oil.
Relations between China and Brazil have grown closer recently. Sinochem Group announced this past weekend that it would pay US$3.07 billion for 40 percent of an oil field offshore Brazil. In April, Wuhan Iron and Steel Company (WISCO), China's third biggest steel maker, planned to invest US$5 billion to build a steel mill in Brazil.
According to the latest statistics released by China Customs, China imported more than 21 million tons of crude oil in April, an increase of 30.91 percent from March. Brazil is now China's 10th biggest trading partner in crude oil imports.
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