Brazil to Supply up to 160,000 Barrels Daily to China

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Feb. 20 – Brazil’s state-owned oil and gas giant, Petrobras, has agreed to supply from 100,000 to 160,000 barrels of oil daily to China.

The oil will be sold to China at market prices and handled by China National Petroleum Corp. and Sinopec.The deal also includes a US$10 billion loan from the China Development Bank, financed over 10 years, to be used for oil exploration of Santos Basin off Brazil’s southern coast.

The contract is set to be finalized in May, when Brazil’s President Luiz Inacio Lula da Silva visits Beijing.

Petrobras has decided to push ahead with exploration plans despite the slowing world economy and lower oil prices. It plans to increase investments to US$174.4 billion with US$92 billion of it to be spent on exploration and production.

China has been consistent when it comes to securing the future of its oil supplies abroad. Recently, it also agreed to a US$25 billion financing deal with Russia’s state-owned companies in return for oil supply taken from the East Siberian fields in the next twenty years.