• 4 minutes Is $60/Bbl WTI still considered a break even for Shale Oil
  • 7 minutes Oil Price Editorial: Beware Of Saudi Oil Tanker Sabotage Stories
  • 11 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 15 minutes Wonders of Shale- Gas,bringing investments and jobs to the US
  • 19 hours IMO 2020 could create fierce competition for scarce water resources
  • 14 hours Evil Awakens: Fascist Symbols And Rhetoric On Rise In Italian EU Vote
  • 4 hours Apartheid Is Still There: Post-apartheid South Africa Is World’s Most Unequal Country
  • 1 day IMO2020 To scrub or not to scrub
  • 4 hours IRAN makes threats, rattles sabre . . . . U.S. makes threats, rattles sabre . . . . IRAQ steps up and plays the mediator. THIS ALLOWS BOTH SIDES TO "SAVE FACE". Then serious negotiations start.
  • 4 hours Total nonsense in climate debate
  • 9 hours Theresa May to Step Down
  • 19 mins Will Canada drop Liberals, vote in Conservatives?
  • 1 day Devastating Sanctions: Iran and Venezuela hurting
  • 36 mins Canada's Uncivil Oil War : 78% of Voters Cite *Energy* as the Top Issue
  • 43 mins Trump needs to educate US companies and citizens on Chinese Communist Party and People's Liberation Army. This is real ECONOMIC WARFARE. To understand Chinese warfare read General Sun Tzu's "Art of War" . . . written 500 B.C.
  • 1 day Level-Headed Analysis of the Future of U.S. Shale Oil Industry
  • 1 day Magic of Shale: EXPORTS!! Crude Exporters Navigate Gulf Coast Terminal Constraints
Alt Text

OPECs Spare Capacity Could Be Put To The Test

OPEC’s spare capacity may be…

Alt Text

Oil Stabilizes Ahead Of Weekly Inventory Data

Oil prices held steady on…

Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Trending Discussions

China To Secure Future Oil Supply With This $10 Billion Loan

Brazil has been one of the hottest plays going in the oil and gas sector the last several years. But recent financial and corruption woes in the country are prompting some critical changes.

The Brazilian Senate last week passed a bill to allow foreign E&Ps to take greater control of offshore fields. And late last Friday, the country announced an even bigger deal — securing a massive funding package from China, in return for oil supply. Related: Brazilian Oil Giant Petrobras Could Lose Its Most Valuable Assets

State-owned oil firm Petrobras said in a filing that the company has signed up a $10 billion loan from China Development Bank. An amount the firm needed in order to cover commitments on its massive debt burden for the coming year.

The most interesting part is what China gets in return for the funding. Namely, crude supply — with Petrobras saying that the loan comes with supply commitments to Chinese buyers.

Such “dollars for barrels” deals have been a common theme for China in Latin America of late. With three Chinese banks having already leant $10 billion to Petrobras last year. And Chinese lenders have also been active in Venezuela’s oil sector recently, to help that nation service its burgeoning debt. Related: Gulf Stock Markets Feel The Pain From Low Oil Prices

Petrobras didn’t say how much oil it is committing to send to China. But similar-sized deals by Chinese banks globally have involved exports in the range of 150,000 to 200,000 barrels per day — representing a significant amount of production.

This deal is yet another sign that China isn’t slowing down in its pursuit of natural resource supply. And in fact may be using the current downturn in energy markets to leverage its massive cash reserves into tangible commodities. Related: Oil Companies On Edge Ahead Of Super Tuesday

For its part, Petrobras is far from out of the woods financially. With the company still having $20 billion in debt coming due over the next two years.

If other solutions aren’t found to those issues, watch for China to continue lending in this part of the world. A move that could sew up a significant amount of supply, under the noses of other crude consumers.

Here’s to being a borrower and a lender.

By Dave Forest

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News