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Brazil's Petrobras, China Ex-Im bank sign US$1b loan deal
[BRASILIA] Brazil's state-run oil firm Petroleo Brasileiro SA said on Monday it has signed a preliminary deal with the Export-Import Bank of China for a US$1 billion loan to pay for goods and services already contracted with Chinese firms.
The loan, if finalized, would allow Petrobras, as the company is known, to pre-finance resources needed for 2017 and diversify its sources of finance, Petrobras said in a statement.
With about US$130 billion in debt, Rio de Janeiro-based Petrobras is the world's most-indebted oil company and one of the most indebted non-financial companies.
A price-fixing, bribery and political kickback scandal that exploded in late 2014 has reduced Petrobras' ability to raise capital in financial markets. A plunge in oil prices slashed exploration and production revenue.
To make up for these factors the company has slashed spending and sought out state lenders from countries such as China that are seeking oil supplies and increase their share of sales of goods and services to Brazil.
In 2015 it received a US$5 billion loan from the state-owned China Development Bank to buy Chinese goods and services. In March it received a US$1 billion loan from the leasing unit of state-owned Industrial and Commercial Bank of China to help finance its P-52 offshore oil platform.
A US$5 billion to US$10 billion loan package, payable in cash or oil, from the China Development Bank completed earlier this year would allow Petrobras to pay most of its US$12 billion of maturing obligations this year.