China Negotiates for Deepwater Oil Blocks Offshore Brazil

[South-South Cooperation] — Brazil, China — Rigzone

Lula’s visit to China has been anything but boring. On the heels of the $10 billion oil for cash deal reached between Brazil and China this past week, comes news of negotiations for two deepwater oil blocks between Petroleo Brasileiro SA (PBR) and China Petroleum & Chemical Corp.

Rigzone reports in this article:

The two oil blocks under negotiation between oil giants China Petroleum & Chemical Corp. (SNP) and Petroleo Brasileiro SA (PBR) are deepwater exploration blocks located in the north of Brazil, the Brazilian company’s top financial official told Dow Jones Newswires on Thursday.

Conversations, however, are still ongoing and the deal isn’t closed, said Almir Barbassa, chief financial officer of Petrobras, as the Brazilian company is known.

The blocks under consideration are within Brazilian waters, are 100% owned by Petrobras and run deep, or about 2,000 meters, he said. They are located off the coast of the two neighboring states of Para and Maranhao in northern Brazil, Barbassa added.

Earlier this week, China’s National Energy Administration Chairman Zhang Guobao told reporters in Beijing that Brazil would offer two oil blocks to Sinopec, as the Chinese company is known, as a way to strengthen energy cooperation between the two countries. He didn’t give any further details.

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Brazil and China move toward convertible currency

[South-South Cooperation] — Brazil, China — Latin America and Brazil

Vitoria Saddi shares her analysis of the latest news to emerge from this weeks meetings between Brazilian President Lula da Silva and Chinese President Hu Jintao. If you have not already checked out Victoria’s site, Latin America and Brazil, I highly recommend you do.

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As we all know, president Lula is in China this week. It seems that one of the goals of his visit is to enable Brazil and China to use their own currencies in trade transactions, rather than the US dollar. The move follows recent Chinese challenges to the status of the dollar as the world’s leading international currency. It should be clear that this deal is different from what China is doing with Argentina – currency swap. In the Brazil – China deal Brazil would pay for Chinese goods with reais and China would pay for Brazilian goods with renminbi. The move follows recent Chinese challenges to the status of the dollar as the world’s leading international currency.

In our view, this is an important step towards convertibility. Clearly, the country can afford to have a convertible currency because it has a healthy balance of payments and the government has been taking steps towards convertibility.

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