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CDB provides $3.5 billion loan tranche to Petrobras for oil exploration and extraction activities (Linked to Record ID#52918)
| Funder | China Development Bank (CDB) |
|---|---|
| Recipient Organization | Petróleo Brasileiro S.A. (Petrobras) |
| Country | Brazil |
| Start Date | Apr 01, 2015 |
| End Date | Mar 18, 2032 |
| Duration | 6,196 days |
| Number of Grantees | 1 |
| Roles | Recipient |
| Data Source | AidData Chinese Aid |
| Grant ID | 38170 |
Grant Description
CDB provides $5 billion dual-tranche loan to Petrobras for oil exploration and extraction activities in Brazil in 2015 On April 1, 2015, Petroleo Brasileiro S.A. (Petrobras) signed an agreement with China Development Bank (CDB) for a loan (with two tranches) worth $5 billion that would support oil exploration and extraction activities.
The loan carried a 12-year maturity (final maturity date: 2027). Its interest rate is unknown. The loan was not collateralized.
However, as a condition of the loan agreement, Petrobras assumed a preferential supply obligation of 100,000 barrels/day to three Chinese companies [China National United Oil Corporation (a subsidiary of CNPC), China Zhenhua Oil Co. Ltd., and Chemchina Petrochemical Co. Ltd (a subsidiary of ChemChina)].
The first, $3.5 billion tranche of the loan was fully disbursed in April 2015 (as captured via Record ID#38170).
The second, $1.5 billion tranche of the loan was authorized by CDB on May 19, 2015 and fully disbursed on June 12, 2015 (as captured via Record ID#52918).
On December 16, 2019, Petrobras made full prepayment of the $5 billion CDB loan, effectively terminating its obligation to supply a total volume of 100,000 barrels of oil equivalent per day to Chinese companies on a preferential basis. This loan agreement was a source of controversy in Brazil.
Leaked information — published by a Brazilian newspaper — revealed that the 60% of the CDB loan proceeds were to be used to buy Chinese equipment.
The ‘local content’ clause in the loan agreement also provoked disagreements between Petrobras and ANP, the government entity that oversees Brazil’s oil sector.
Complying with a request from the Securities and Exchange Commission of Brazil, Petrobras made a public statement about the issue.
It clarified that, due to previous agreements, the local content condition was already fulfilled so there was no need for it to acquire additional Chinese equipment.
Staff Comments
1. Some sources suggest that Petrobras Global Trading B.V. (PGT BV), a wholly-owned subsidiary of Petroleo Brasileiro S.A.(Petrobras), was the borrower. This issue requires further investigation.
Sources & References
- Petrobras receives $1.5B from China Development Bank
- Brazil’s Petrobras Obtains $3.5 Billion in Financing From China Development Bank
- Petrobras Deepens China Tie With $3.5 Billion Loan Deal
- 中开行贷款15亿美元予巴西国家石油
- 国开行35亿美元救急巴西石油 石油换贷款或在酝酿
- Latin America And China’s ‘New Normal’ – Analysis
- Li Keqiang’s Latin America Trip: More
- Not Different
- China: Lender Of First (And Last) Resort
- Petrobras’s China Cash Stems Bond Tumble But Comes With a Stigma
- China-Latin America Finance Database
- BU_PITCH_ENGLISH_2018.xlsx
- The Sustainable Infrastructure Finance of China Development Bank: Composition
- Experience and Policy Implications
- Cooperation with China Development Bank
- Petrobras reports on debt pre-payment with China Development Bank
- Programa de Becas para Investigadores sobre China del Centro de Estudios China-México 201
- Clarification on News: Conditions of the Loan with the China Development Bank (CDB)
- Funding Agreement of USD 5 Billion with China Development Bank Corporation
- Chinese investment not Brazil panacea: analysts, 2015 Annual Report
- PETROBRAS-CHINA RELATIONS: TRADE
- INVESTMENTS
- INFRASTRUCTURE PROJECTS AND LOANS1
- ANNUAL GENERAL MEETING (AGM) EXTRAORDINARY GENERAL MEETING (EGM)
- Petrobras Inks US$ 7 Billion Financing Deals With Chinese Banks Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.
All Grantees
Petróleo Brasileiro S.A. (Petrobras)
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