A spate of recent news concerning Brazil’s Petrobras, which is looking to continue development of its prodigious oil and gas reserves despite headwinds caused by the global financial crisis, culminated in a just-announced agreement for China Development Bank to extend the company a $10-billion bilateral loan. At the same time, China Petroleum & Chemical Corp. (Sinopec) will benefit from an agreement for guaranteed supplies of crude oil. News reports have picked up on the quote, which appeared in the Wall Street Journal on May 18, as follows: “The US has a problem,” said Sergio Gabrielli, chief executive of Petrobras, “there isn’t someone in the US government that we can sit down with and have the kinds of discussions we’re having with the Chinese.” China has recently offered loans to oil-producing countries that include Russia, Venezuela, and Kazakhstan. The $10-billion loan to Brazil will help finance development of the Tupi field, said to be the largest crude oil discovery in the Americas in more than 30 years. Oil buried in the Santos and Campos basins will be difficult to access, but Petrobras says it is cost effective to do so, even at today’s depressed petroleum prices. Earlier this month, Petrobras, which is state-controlled but trades on the New York Stock Exchange, announced initial production from the field. In addition, Brazil is looking to invest in ship yards, offshore platforms, and other infrastructure. The country is said to be poised to invest more than $174 billion in the energy producing sector. Although the loan agreement is not directly tied to the agreement on oil deliveries, Beijing-based Sinopec will get 150,000 barrels a day of oil this year from Petrobras, and 200,000 barrels a day between 2010 and 2019. Russia is slated to provide China with 300,000 barrels a day in return for its loan, and Venezuala will provide 200,000 barrels a day. Petrobras is expected to reach a nationwide daily production of nearly 2.7 million barrels by 2013, and hopes to launch five new oil production and five new gas production systems in 2009.
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