SAO PAULO(Reuters) - The China Development Bank and Brazil's state-run oil company Petrobras (PETR4.SA)(PBR.N) are finalizing a deal for the bank to extend a $10 billion line of credit in exchange for future oil supplies, a Brazilian newspaper said on Wednesday.
Petrobras Chief Executive Jose Sergio Gabrielli said on Monday that the company was seeking financing from foreign governments to bankroll an aggressive investment plan, but he gave no details on the amounts or sources.
Brazil's O Estado de S.Paulo daily said China's vice president Xi Jinping would be in Brazil on Thursday to advance the negotiations on the $10-billion deal, which would not likely be formally announced until President Luiz Inacio Lula da Silva visits China in May.
The financing is in line with China's policy of attempting to shore up future supplies in natural resources such as petroleum, agricultural goods and minerals for its voracious economy.
On Tuesday, the China Development Bank, Russia's state oil champion Rosneft (ROSN.MM) and pipeline monopoly Transneft (TRNF_p.RTS) signed a $25 billion financing deal in exchange for future oil from the huge new East Siberian oil fields that China hopes will power its economy for the next two decades. [ID:nLH444229]
Petrobras said on Monday it was negotiating with up to four oil consumer countries to receive financing from them in exchange for future oil supply guarantees.
The company needs financing to help it cover the massive costs of exploring large new discoveries of high-grade light oil and natural gas. Analysts estimate the so-called subsalt reserves could contain up to 80 billion barrels of oil, catapulting Brazil into the top 10 of the world's oil producers.
This would be the first time Petrobras will have negotiated this type of financing, the company's finance director, Almir Barbassa, said earlier this week. [ID:nN16191048]
The state-run energy company announced last month it would raise its five-year investment plan by 55 percent at a time when large raw materials companies around the world are cutting back budgets in the face of falling prices and demand.
Petrobras said it plans to invest $174.4 billion from 2009 through 2013, compared with the $112.4 billion planned for investment for 2008-12. The company will invest $28.6 billion in 2009 alone. (Reporting by Reese Ewing; editing by Jim Marshall)