Brazil's Petrobras Strengthens Partnership with Bank of China

Industrials Author: Notrice Jun 11, 2024 06:21 PM (GMT+8)

Since President Lula took office at the beginning of 2023, Brazilian oil giant Petrobras has accelerated its financial activities.


Last year, Petrobras signed Memoranda of Understanding (MOU) with the China Development Bank(中国国家开发银行) and the Bank of China(中国银行) to explore investment opportunities and collaborate in low-carbon and green finance. These agreements also cover financing Petrobras's supply chain and promoting trade and financial exchanges between Petrobras and Chinese enterprises.

Last week, the company announced the signing of an MOU with Sinosure(中国出口信用保险公司), which aims to achieve similar goals. Prior to this agreement, Petrobras had entered into a series of agreements with several Chinese companies, including Sinopec(中国石化), CNOOC(中国海洋石油集团), China Energy Engineering Group(中国能源建设集团), and CITIC Construction(中信建设公司).

Under President Lula's leadership, energy relations between Brazil and China are expected to improve, following a period of diplomatic strain during President Bolsonaro's administration. During Lula's visit to China in April 2023, the two nations officially signed multiple energy agreements at both the government and business levels, including cooperation in the electricity sector with Chinese companies such as State Grid(中国国家电网) and SPIC(国家能源投资集团).

Previously, Petrobras had signed MOUs with the China Development Bank(中国国开行) and the Bank of China to evaluate collaboration in the green finance sector. These MOUs aim to explore investment and cooperation opportunities in low-carbon initiatives and green finance, provide financing for Petrobras's supply chain, and promote commercial and financial exchanges with Chinese companies.

Among the key projects of Petrobras, such as Mero and Búzios, China expanded its local exploration and production (E&P) operations by acquiring assets in the Pelotas Basin in December 2023. Additionally, China has been constructing Floating Production Storage and Offloading (FPSO) units for Petrobras through its Cosco and CIMC Raffles shipyards. The new agreement with the Bank of China helps Petrobras improve the financing conditions for FPSO construction.