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Overview

ICBC Leasing signs $2 billion sale and leaseback agreement with Petrobras

Commitments (Constant USD, 2023)$2,092,396,763
Commitment Year•2015Country of Activity•BrazilDirect Recipient Country of Incorporation•BrazilSector•Industry, Mining, ConstructionFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Oct 13, 2015
Start (actual)
Mar 8, 2016
Last repayment
Oct 10, 2025

Geospatial footprint

Map overview

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ICBC Leasing signs sale and leaseback agreement with Petrobras to build offshore oil platforms. More detailed locational information can be found at: Roncador: https://www.openstreetmap.org/node/11136250692 Jubarte: https://www.openstreetmap.org/node/1973965684

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned companies

  • ICBC Financial Leasing Co., Ltd. (ICBCFL) (ICBC Leasing)

Receiving agencies

State-owned companies

  • Petróleo Brasileiro S.A. (Petrobras)

Loan desecription

ICBC Leasing signs $2 billion sale and leaseback agreement with Petrobras

Interest type•UnknownMaturity•10 years

Narrative

Full Description

Project narrative

On October 13, 2015, Petróleo Brasileiro S.A. (Petrobras) announced the conclusion of successful negotiations on a $2 billion financing agreement with ICBC Financial Leasing Co., Ltd. (ICBCFL; ICBC Leasing). The sale and leaseback agreement spans 10 years and provides a financial lease for two of Petrobras' existing deep-water oil platforms (P-52 and P-57) from its wholly-owned subsidiary Petrobras Netherlands B.V. (PNBV). The funds were to be made available to Petrobras once both parties fulfilled the precedent conditions of the agreement. Then, on March 8, 2016, Petrobras received $1 billion from ICBC Leasing in exchange for the P-52 offshore oil platform, per the October 2015 agreement. The P-52 offshore oil platform was sold to the bank (ICBC Leasing) and the debt was to be settled by lease payments. The transaction had a 10 year maturity. Full ownership of the oil platform was to be transferred back to Petrobras by the end of the lease term in March 2026. Then, on September 10, 2018, Petrobras prepaid $750 million for financial leasing on P-52 despite the original maturity of March 2026. The P-52 oil platform is located in Roncador oil field in Brazil’s Campos Basin. The P-57 oil platform is located in Jubarte oil field.

Staff comments

1. This project represents one part of a larger cooperation agreement signed by Chinese Premier Li Keqiang during his visit to Brazil in May 2015 to facilitate cooperation between Petrobras and ICBC. 2. Sale and leaseback (or sale-leaseback) agreements are generally considered to be off-balance-sheet hybrid debt products.