China Seeks to Invest $10 Billion in Brazil Oil

By Marco Sibaja

BRASILIA, Brazil -- China wants to loan Brazil's state oil company $10 billion to help develop massive new oil fields in deep water off the coast of Rio de Janeiro, Brazil's top energy official said in comments published Monday.

Mines and Energy Minister Edison Lobao also told the Folha de S. Paulo newspaper that the United Arab Emirates has offered to finance field development, but he did not specify a price tag.

Lobao said Chinese officials contacted his ministry to propose a loan, and Petrobras(PZE Quote) then negotiated directly with the Chinese. He gave no details on the status of talks, and any deal would have to be approved by his ministry.

Petrobras, in an emailed statement to The Associated Press, didn't confirm a China deal, but said the company has historically searched for "varied sources of financing" and that recent deals will be included in its new investment plan, expected in the coming weeks.

Lobao told the privately run Agencia Estado news agency other countries also wanted to participate: "It's not just China. It's a range of opportunities that Petrobras has."

Lobao said the ministry has talked with a Japanese consortium, Canadian banks and various foreign oil service companies that want to invest in or work on offshore finds. He offered no other details.

Brazil also is ready to tap its foreign reserves to offer a credit line for exploration by Petroleo Brasileiro SA if needed, he added. Lobao's ministry confirmed the comments, but a spokesman did so only on condition of anonymity in keeping with department policy.