Oil:

Brazil/China sign long term oil supply and funding accord
Mercopress - February 19, 2009

Brazil signed an agreement to supply China with 100,000 to 160,000 barrels of oil per day at market prices in exchange for a loan from the China Development Bank to help develop its huge oil reserves.

The agreement signed Thursday and which will take effect immediately, was announced at Brazil's foreign ministry after President Luiz Inacio Lula da Silva met with Vice President Xi Jinping in the capital city of Brasilia.

Brazil's government managed oil and gas corporation Petrobras signed a memorandum of understanding to secure long-term financing from the Chinese Development Bank and hopes to begin receiving funds as early as May. The funds are to help extract massive, newly found oil reserves deep beneath the ocean floor off Brazil's southern coast.

"We'll settle it by the time the president Lula da Silva visits China in May" Petrobras CEO Jose Sergio Gabrielli told reporters after meeting with Chinese officials.

The understanding confirms the interest of both countries: Brazil needs funds to develop the new fields and China is determined to ensure long term supplies of natural resources such as oil, minerals and agriculture commodities. This is the purpose of Vice-president Xi Latinamerican tour which so far has included Mexico, Colombia, Venezuela and now Brazil.

Brazilian Foreign Minister Celso Amorim hailed the deals as proof of growing cooperation between two large emerging markets. "This is the most important
South-South relationship" he underlined.

On Tuesday, China Development Bank signed a 25 billion US dollars financial
deal with Russia's state oil champion Rosneft and pipeline monopoly Transneft in exchange for oil from the huge new East Siberian fields for the next two decades.

Petrobras is to supply the oil to China’s government owned Sinopec. Brazil has discovered high grade light oil and natural gas deposits in the Santos Basin, and further south which is estimated to hold 60 billion barrels of oil.

CEO Gabrielli recently announced a five-year investment developing plan totalling 175 billion US dollars.

Brazil has been talking with China about the loan since last year. The company has been seeking alternatives to international bank lending and bonds to finance its spending plan in the face of an international credit crunch.


Petrobras establishes new oil production record
Mercopress - February 21, 2009

Petrobras average oil and gas production in Brazil during January climbed to 2,219,165 barrels of oil equivalent per day (boe), 4.8% more than a year ago and up 0.7% over December 2008. Oil from domestic fields was 1,922,946 barrels/day, setting a monthly record, 5.3% above the mark set a year earlier and 2.5% more than the December volume.

The previous monthly record, set in September 2008, was 1,897,563 barrels per day, according to a release from the corporation.

The 47,000 barrel-per-day difference was attributed to the Campos Basin with production going on stream at platform P-51 (at the Marlim Sul field) plus the increased volume pumped by P-53 and new wells from the Marlim field.

Considering Petrobras’ fields in Brazil and abroad, the total oil and natural gas production last January reached 2,434,121 boe. This was 3.8% more than in January 2008 and the same as the total volume extracted last December.

The volume of oil and natural gas coming from the eight countries where Petrobras has production assets, in barrels of oil equivalent, reached 214,956 barrels per day, a 7.3% compared to the previous month, and 5.3% below the January 2008 production mark.

Natural gas production in domestic fields topped-out at 47.095 million cubic meters per day in January. This was 9.9% less than the total lifted in December 2008, keeping pace with the reduced domestic demand in the month.

Natural gas production abroad, meanwhile, was 15.762 million cubic meters per day, below the 17.062 million cubic meters produced in December 2008.
The international variation resulted from decreased production in Bolivia due to the lower demand on the Bolivia-Brazil Gas Pipeline, and from operating issues at the Coulomb field, in the United States.