MercoPress. South Atlantic News Agency

Brazil/China to sign agreement to develop sub-salt oil deposits

Brazil's President Lula da Silva is to sign a “voluminous” financing agreement for government managed Petrobras on a visit to China next week said Energy Minister Edison Lobao.

Lobao did not detail the amount of the loan, but separate reports said that the agenda during Lula da Silva's visit includes discussion of a 10 billion US dollars financing package agreed under a memorandum of understanding signed in February by Petrobras and the China Development Bank.

Petrobras Chief Executive Officer Jose Sergio Gabrielli, who was expected to accompany Lula da Silva on the journey to China earlier this month, told state media that the corporation would soon finalize the agreement with China to finance sub-salt oil development offshore Brazil.

Petrobras is open to having Chinese state-owned oil companies take equity stakes in oil exploration and production in Brazil as part of a package deal involving the 10 billion in financing, according to a report by Dow Jones Chinese Financial Wire.

Apparently Petrobras is in talks with four Chinese companies about possible equity stakes and also on the volumes of crude oil Brazil would supply as part of a credit-for-oil deal they hope will be ready by early next week, when Lula da Silva visits China.

As part of the Brazil-China outline agreement in February, Petrobras is to sell China Petrochemical Corp. (Sinopec), 60.000-100.000 barrels per day of heavy crude oil as part of the credit deal. Other four Chinese companies could also be involved in the operation, PetroChina Co.'s Chinaoil, Sinopec's Unipec, Sinochem Corp., and Zhuhai Zhenrong.