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China's loan to Petrobras may help pay most 2016 debt
[RIO DE JANEIRO] China's loan to Brazil's Petrobras announced Friday is for US$5 billion to US$10 billion and can be paid in cash or oil at China's request, and may help pay the bulk of the US$12 billion in debt the state-run oil company must pay this year, a source involved in debt talks told Reuters late Friday.
The loan from the China Development Bank was first agreed to in early 2015, and when added to a US$5 billion CDB loan made in 2009, increases the bank's debt exposure to Petroleo Brasileiro SA as Petrobras is formally known, to as much as US$15 billion, the source said.
Petrobras, the world's most indebted oil company, said in a securities filing earlier on Friday that the agreement included supplying Chinese companies with fuel, similar to a deal reached in 2009.
Under that deal Brazil guaranteed the supply of 200,000 barrels of oil a day to China's state oil firm Sinopec for the next 10 years.
Petrobras has plans to sell about US$14 billion of assets this year in an attempt to cut its US$130 billion debt and maintain cash amid a plunge in world oil prices and a massive corruption scandal at the company.
President Dilma Rousseff said on Jan 15 the government did not rule out injecting new capital into the embattled oil company.
A kickback scheme that overcharged Petrobras for projects to later siphon some of that money to political parties has dragged down the company's shares and raised doubts about its management.