After China Development Bank and Chinese export credit financing agency agreed to provide a total of $10 billion in financing for Brazil’s state-run energy company Petrobras in May, a major Chinese shipbuilder on Tuesday delivered a huge floating oil and gas production, storage and offloading (FPSO) vessel to the company.
The FPSO Cidade de Saquarema has a daily processing capacity of 150,000 barrels of crude oil and 6 million cubic feet of gas. It has a storage capacity of 1.6 million barrels of crude oil.
China State Shipping Corporation and Dutch-based SBM Offshore are contractors of the refurbishment and conversion of the once super large oil tanker.
The FPSO Cidade de Saquarema is now 346.5 meters long and 58 meters wide, with a deck as large as three soccer stadiums.
Brazil is reeling from a slowing economy and a corruption scandal engulfing its largest oil producer, Petrobras. The embattled oil company was struggling to quantify operating losses due to corruption and mismanagement.
The China Development Bank in April extended a separate $3.5 billion loan to Petrobras.
During the visit of Chinese Premier Li Keqiang to the country in May this year, China extended billions of dollars in loans and investment to fellow BRICS-member Brazil.
Official data released in June revealed Brazil’s oil exports to China increased threefold in the first five months of this year, making Beijing the largest consumer of Brazilian oil in the world.
Brazil exported 5.4 million tons of oil to China from January to May, accounting for 35 per cent of Brazil’s total oil exports in the same period. The amount of oil shipped to China is twice as much as that to the United States.
Earlier this year, Brazilian President Dilma Rousseff and Chinese Premier Li Keqiang unveiled $10 billion in Chinese credit to Brazilian oil giant Petrobras.
Petrobras has completed negotiations with the China Development Bank (CDB) for a 10-year bilateral credit line worth $10 billion.
China’s higher demand for oil also helped Brazil achieve record oil exports of 15 million tons from January to May, up 80 per cent from the same period last year.
However, as oil prices have fallen significantly over the past months, the record sales did not generate corresponding high revenues.
With increased oil purchases, China has become the largest buyer of four major Brazilian products. The other three are soybeans, iron ore and cellulose.
China replaced the United States to become Brazil’s largest trade partner in 2009.
Sino-Brazilian trade value amounted to $86.67 billion in 2014.
As Chinese demand for commodities wanes, exports to China, Brazil’s largest trade partner, fell 12 per cent in 2014.
“Investment between China and Brazil can and will mean an improvement of our economic situation,” Brazilian President Rousseff said earlier this year.
TBP and Agencies