Petrobras Taps Chinese Banks to Finance Deepwater Oil Expansion

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Petrobras is recruiting Chinese banks to finance its deepwater oil expansion in a sign of growing ties between Brazil’s state-controlled oil company and the world’s second-biggest economy.

Rio de Janeiro-based Petrobras recently met with Chinese financial institutions to get loans for itself, as well as for its equipment and services suppliers, Chief Financial Officer Sergio Caetano Leite said in an interview. The idea is to make sure there’s enough affordable capital available for deep-water oil projects in Brazil’s South Atlantic, he said.

“Petrobras has been growing at a fast pace and wants to ensure that its suppliers can keep up with this growth,” Leite said in an interview at Petrobras’s headquarters. Chinese financial institutions already account for more than 25% of Petrobras’s loans, and Leite sees this share rising even though the company will keep total liabilities below $65 billion. Petrobras signed five-year term agreements with China Development Bank and the Bank of China during a business trip to the country last month.

Petrobras has the biggest and fastest-growing FPSO fleet on the planet. It will add 14 more by the end of 2027, and if its suppliers have better access to credit it will lower overall costs, Leite said.

 

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