Petrobras jumps into bed with China for $10 billion, securing the immediate future of the deeply indebted oil and gas company.
The US$10 billion worth of financing will go a long way to keep Petrobras afloat, as it continues to struggle with what is the largest debt in the global oil and gas industry, currently estimated to be in the region of US$130 billion.
Petrobras Jumps Into Bed With China
The term sheet for the deal was signed Friday by the Brazilian state run company and the China Development Bank (CDB).
As well as debt management, China’s investment is likely to used to continue Petrobras’ ambitious aims of developing the financially demanding pre-salt Campos basin almost single handedly.
Details of the term sheet have not been revealed, however Petrobras did add that a trade agreement with China is also being negotiated as part of the CDB investment.
Petrobras China Oil
The trade agreement will see Petrobras commit to supplying China with oil, in return for its US$10 billion loan, likely to be at a rate far below global market prices.
It will be the second agreement of its type between the Brazilian state run company and China, having both previously signed a deal back in 2009.
The previous deal in 2009 also, for US$10 billion, included an agreement for the supply of crude oil.Last updated on 03:00PM - 14/03/16