Thursday, April 15, 2010

China's Sinopec to sign Brazil deal with Petrobras

* Deal will include development of Brazil oil resources

* China development bank will also sign agreement (Recasts, adds background, context)

By Emma Graham-Harrison

BRASILIA, April 15 (Reuters) - Brazil state oil company Petrobras on Thursday will sign a cooperation deal with China's development bank and its second-largest oil company that includes development of Brazilian oil resources, a Chinese official said on Thursday.

The deal comes amid a summit meeting in Brasilia, Brazil's capital, of leaders from Brazil, Russia, India and China -- known as the BRICs.

It follows speculation that Petrobras, which last year borrowed $10 billion from China's development bank in a deal tied to oil sales, may seek more Chinese financing as a stalled capitalization plan leaves it facing a possible cash crunch.

Sinopec Chairman Su Shulin told Reuters that deal will cover the development of Brazilian oil resources and trade with China but declined to provide further details.

Su said Sinopec last year bought 2.28 million tonnes of Brazilian oil.

Brazilian media this week reported that Sinopec will buy stakes in two offshore blocks from Petrobras (PETR4.SA)(PBR.N) as part of a cooperation agreement to be signed during the BRIC leaders' summit. [ID:nN14140781]

A Sinopec official told Reuters this month he expected the company would sign an oil supply agreement during the visit. [ID:nTOE63008D]

Petrobras Chief Executive Jose Sergio Gabrielli has denied rumors that the company is negotiating another financing deal with China. It already has borrowed aggressively to develop massive deep sea reserves in the subsalt province and has said it plans no further borrowing in the short term. (Writing by Brian Ellsworth; Editing by Walter Bagley)

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