CNPC Finance (HK) Limited provides loan to help CNODC Brasil Petróleo e Gás Ltda. acquire a 5% stake in Buzios oilfield production rights

The Búzios oilfield is located in Santos Basin, southeast offshore of Brazil, with an average water depth of approximately 2,200 meters. It is the world's largest deep-water pre-salt producing oil field. On June 11, 2021, Petróleo Brasileiro S.A. (Petrobras), Pré-sal Petróleo S.A. (PPSA) and its partners CNODC Brasil Petróleo e Gás Ltda. (CNODC) and CNOOC Petroleum Brasil Ltda. (CNOOC) signed the so-called ‘Búzios co-participation agreement’, which regulates the coexistence of the Transfer of Rights Agreement and the Production Sharing Contract (PSC) for the Surplus of the Transfer of Rights for the Búzios field, in the Santos Basin pre-salt area. The signing of the co-participation agreement followed a bidding process that was conducted by the Brazilian National Agency of Petroleum, Natural Gas and Biofuels (ANP) and held on November 6, 2019, in which Petrobras acquired 90% of the rights to explore and produce the surplus volume of the Transfer of Rights from Búzios field, in partnership with CNODC (5%) and CNOOC (5%). The value of the total compensation due to the Transfer of Rights Agreement (100% Petrobras) for the Production Sharing Contract is $29.4 billion. Since Petrobras has a 90% stake in the consortium of the PSC contract, and CNOOC and CNODC both hold 5% stakes, CNODC and CNODC were collectively responsible for providing $2.94 billion ($1.47 billion each) in cash to Petrobras on the effective date of the Búzios Co-participation Agreement. The co-participation agreement became effective as of September 1, 2021, marking a milestone for the Búzios PSC consortium to start extracting oil from the Búzios field. There are currently four FPSOs operating in Buzios and up to a total of 12 floating platforms are expected to be installed by 2030, potentially taking output to 2 million barrels per day. According to CNPC Finance (HK) Limited, it issued a loan in 2019 to facilitate CNODC’s acquisition of a 5% stake in the Búzios oilfield. The borrowing terms of the loan are unknown.

Additional details

1. The face value of the CNPC Finance (HK) Limited loan is unknown. However, given that the total cost of the acquisition to CNODC Brasil Petróleo e Gás Ltda. was $1.47 billion and most Chinese acquisition loans cover at least 70% of the total cost of the acquisition, AidData assumes for the time being that the face value of the CNPC Finance (HK) Limited loan was roughly equivalent to $1.029 billion. This issue warrants further investigation. 2. CNODC Brasil Petróleo e Gás Ltda. is a wholly owned subsidiary of China National Oil and Gas Exploration and Development Corporation (CNODC), which is itself a wholly-owned subsidiary of China National Petroleum Corporation (CNPC). 3. An official source of evidence that a loan was issued by CNPC Finance (HK) Limited in 2019 is pg. 9 of the 2019 Annual Report of CNPC Finance (HK) Limited (http://cpf.cnpc.com.cn/cpf/gsnbxx/202007/b0d41d52a8424f62a63f35a3bcab7d8d/files/ec94a72637314ebe97fce62957bbff70.pdf). 4. The Chinese project title is 署巴西布茲奧斯(Buzios)收購 or 署巴西布茲奧斯收購 or 布兹奥斯项目 or 巴西深海盐下项目.

Number of official sources

5

Number of total sources

11