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Petrobras has settled a debt of US$3 billion with the China Development Bank ahead of time and will repay another debt, this one of US$5 billion, in December, ending an agreement for the preferential supply of 100,000 barrels of oil equivalent daily, Reuters reports, quoting the Brazilian company.
Petrobras signed the loan deal with the China Development Bank ten years ago, with the total amount at US$10 billion. It said at the time the Chinese funds would help it with its 2009-2013 investment plan that amounted to US$174.4 billion and also boost production from 2.4 million barrels of oil equivalent daily in 2008 to 3.6 million boed in 2013 and as much as 5.7 million boed in 2020.
The funds also participated in the first phase of development of Brazil’s now famous presalt zone, which has attracted a host of supermajors to the Latin American country with its abundant oil and gas resources that can be extracted at competitive costs.
The ties between Petrobras and the Chinese oil industry have also been strong. State oil giant CNPC partnered with the Brazilian company on the construction of a new refinery, Comperj, even though this project has stalled due to a change in the Petrobras management that’s against a downstream expansion.
Petrobras has also turned to Chinese independent refiners: Reuters reported earlier this year that it was sending crude oil cargoes to China to sit in storage for when teapot refiners needed additional import barrels. “The idea for storage is to sell small parcels and to be more competitive in this market. The main thing is to have oil anytime,” an unnamed source said at the time.
Brazil’s Petrobras plans to invest a total US$105 billion in the five years to 2023 and divest assets worth US$35 billion, chief executive Roberto Castello Branco said in June. Its production, as of July, stood at 2.76 million boed.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.