• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 2 days Solving The Space Problem For America’s Solar Industry
  • 4 days Investment in renewables tanking
  • 2 days Russian Officials Voice Concerns About Chinese-Funded Rail Line
Clean Energy Megaprojects Face Iron Law

Clean Energy Megaprojects Face Iron Law

Offshore wind projects are not…

Why Brazil’s Oil Major Is Rapidly Paying Off Its Chinese Debt

Petrobras has repaid a $5-billion loan to China Development Bank eight years ahead of the deadline.

Reuters reported, citing a securities filing by the Brazilian energy major, that the repayment means it will no longer have to offer Chinese oil companies preferential access to 100,000 bpd.

Petrobras signed a $10-billion debt finance deal with China Development Bank back in 2016. In return for the money, it was obliged to offer Chinese companies preferential terms on 100,000 barrels of crude oil daily.

The company, which used to be the oil major with the greatest debt pile during the 2014 price crisis, repaid a small portion of the debt between 2016 and 2018. This year, including the $5 billion paid on the 16th of December, it has already repaid $8 billion. As Petrobras said when it announced it will be debt-free from CDB in December, the debt redemption would result in the “termination of the preferential supply obligation of 100,000 barrels of oil equivalent per day to Chinese companies under market conditions and for the same period of the loan.”

The early debt redemption is part of Petrobras’s turnaround strategy after it almost crashed under the twin blows of the oil price crisis and a corruption scandal that involved a number of high-ranking executives and Brazilian politicians.

Now, with the government change in Brazil, the state giant may be on its way to private hands. Reuters first reported in August, citing unnamed sources, that President Jair Bolsonaro wanted to fully privatize the company by the end of his term in office. There has been no official confirmation of these plans yet, however.

In the meantime, Petrobras is selling assets to continue shrinking its debt pile. It recently struck a deal with the government that settled their dispute about the so-called transfer-of-rights offshore area, which will make Petrobras $9 billion richer. The company has also increased its divestment program for the years to 2023, to $35 billion from $27 billion.

By Irina Slav for Oilprice.com


More Top Reads From Oilprice.com:

Join the discussion | 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