• 2 minutes California to ban gasoline for lawn mowers, chain saws, leaf blowers, off road equipment, etc.
  • 6 minutes China and India are both needing more coal and prices are now extremely high. They need maximum fossil fuel.
  • 11 minutes Europeans and Americans are beginning to see the results of depending on renewables.
  • 16 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 4 hours Monday 9/13 - "High Natural Gas Prices Today Will Send U.S. Production Soaring Next Year" by Irina Slav
  • 14 hours "A Very Predictable Global Energy Crisis" by Irina Slav --- MUST READ
  • 6 hours Two Good and Plausible Ideas about Saving Water and Redirecting it to Where it is Needed.
  • 2 days Did China cherry-pick the factors that affected the economic slow-down?
  • 35 mins Putin and Xi have decided not to attend the Climate Summit in Glasgow
  • 18 hours "Here is The Hidden $150 Trillion Agenda Behind The "Crusade" Against Climate Change" - Zero Hedge re: Bank of America REPORT
  • 21 hours Are you aware of Oil Price short videos on our energy topics?
  • 58 mins The Climate Scare Stories Began With Far Left Ideology Per GreenPeace Co-Founder
  • 1 day Is China Rising or Falling? Has it Enraged the World and Lost its Way? How is their Economy Doing?
  • 1 day NordStream2
  • 411 days Class Act: Bet You've Never Seen A President Do This.
Dave Forest

Dave Forest

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

More Info

Premium Content

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





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News