MADRID ( TheStreet) -- Repsol, the Spanish oil and gas company, and Sinopec ( SNP), the Chinese oil and petrochemicals giant, formed a Brazil joint venture worth $17.8 billion.

The companies will develop the projects of Repsol Brasil, the upstream subsidiary of Repsol in Brazil, creating one of Latin America's largest energy companies, Repsol said in a statement Friday.

Repsol Brasil plans to issue new shares valued at $7.1 billion to which Sinopec will fully subscribe. Repsol will hold 60% of the shares of Repsol Brasil while Sinopec will hold 40%.

Repsol Brasil's assets are currently valued at $10.66 billion.

"The injection of funds generated by this transaction will allow Repsol Brasil to fully develop all of its current projects, which include some of the world's largest exploratory discoveries in recent years," Repsol said in the press release.

-- Written by Joseph Woelfel

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