UPDATE 4-China Sinopec signs Brazil oil deal with Petrobras

Fri Apr 16, 2010 12:54am BST

By Raymond Colitt
BRASILIA, April 15 (Reuters) - Brazil's state oil company Petrobras signed a broad cooperation agreement on Thursday with Chinese oil company Sinopec and China's development bank that includes possible partnerships in two oil blocks.
The deal, signed ahead of a summit meeting of leaders from Brazil, Russia, India and China, known as the BRICs, established tentative and wide-ranging deals in contrast to last year's $10 billion oil-for-loan contract between Petrobras and China.
Petrobras said in a statement it reached agreements in areas including exploration and production, refining and transport, and supply of goods and services.
"In the area of E&P, we note the intention of the two sides to evaluate future partnerships, including the possibility for Petrobras to sell part of its stake in the blocks BM-PAMA-3 and BM-PAMA-8, located in the Para-Maranhao basin," the company said late on Thursday.
It also said the agreement included "cooperation with the CDB (China Development Bank) in relation to possible bilateral financing, to be negotiated between the two sides."
Petrobras won 100 percent control of the two Para-Maranhao blocks in auctions in 2001 and 2004, according to its Web site.
It has discovered billions of barrels in the deep waters of the subsalt region, which has drawn the interest of oil companies around the world -- though most of that oil was found further south in the Santos Basin. 
Congress is still discussing a capitalization plan that would give the government new Petrobras shares in exchange for rights to billions of barrels of oil in unexplored offshore fields.
Brazil's new discoveries have opened a new area of potential bilateral cooperation.
While Brazil is seeking huge amounts of financing to tap oil thousands of meters below the ocean's surface, cash-rich and energy-hungry China is scouring the globe for increasingly scarce crude reserves.
China in 2009 lent Petrobras $10 billion in return for a guaranteed supply of 200,000 barrels per day of oil for a decade.
A division of Sinopec Group (0386.HK)(SNP.N) this week agreed to pay $4.65 billion for ConocoPhillips's (COP.N) stake in a Canadian oil sands project, China's second-largest investment in North America. (Additional reporting by Emma Graham-Harrison in Brasilia and Guillermo Parra-Bernal in Sao Paulo; Writing by Brian Ellsworth; Editing by Marguerita Choy)

Source: http://uk.reuters.com/article/idUKN1511986720100415?pageNumber=2&virtualBrandChannel=0

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