China, which has already surpassed the U.S. to become Brazil's largest trading partner, has agreed to loan state-owned Petroleo Brasileiro SA (PBR) $10 billion to fund offshore oilfield exploration.
In return, Petrobras will supply 200,000 barrels of oil a day for the next 10 years to China's state-owned Sinopec (SNP). This is just the the latest foreign investment for China which is looking to diversify its global supplies.
The loan-for-oil deal was reached in meetings this week between Brazilian President Luiz Inacio Lula da Silva and Chinese president Hu Jintao. Petrobras has said that it needs about $174 billion to increase reserves and production capacity, following one of the biggest finds in history in the Santos basin which has the potential to position the country as one of the largest oil producers in the world.
In addition to the oil deal, Lula has been pushing to ditch the U.S. dollar in trade with China, who has become very interested as of late in Brazil's natural resources. China's central bank governor Zhou Xiaochuan has also suggested replacing the U.S. dollar as the global reserve currency with a new standard run by the International Monetary Fund.
In return, Petrobras will supply 200,000 barrels of oil a day for the next 10 years to China's state-owned Sinopec (SNP). This is just the the latest foreign investment for China which is looking to diversify its global supplies.
The loan-for-oil deal was reached in meetings this week between Brazilian President Luiz Inacio Lula da Silva and Chinese president Hu Jintao. Petrobras has said that it needs about $174 billion to increase reserves and production capacity, following one of the biggest finds in history in the Santos basin which has the potential to position the country as one of the largest oil producers in the world.
In addition to the oil deal, Lula has been pushing to ditch the U.S. dollar in trade with China, who has become very interested as of late in Brazil's natural resources. China's central bank governor Zhou Xiaochuan has also suggested replacing the U.S. dollar as the global reserve currency with a new standard run by the International Monetary Fund.
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