As the credit market dries up, oil companies that need urgent investments are going to China for cash. Brazilian oil company Petroleo Brasileiro SA announced that it has secured a $10 billion loan from China in return for a long-term supply of oil.
This is not the only oil-for-loan deal that China made with oil-rich countries. Similar arrangements have been made with Kazakhstan and Russian oil and pipeline companies.
The good news is that the investments from the Chinese government in oil companies can help oil companies to continue infrastructure investments. This is important because when the global economy recovers, new supplies will be needed to meet a new wave of energy demands. However, if China is the only major investor in the field, it may reduce the market competitiveness.
This is not the only oil-for-loan deal that China made with oil-rich countries. Similar arrangements have been made with Kazakhstan and Russian oil and pipeline companies.
The good news is that the investments from the Chinese government in oil companies can help oil companies to continue infrastructure investments. This is important because when the global economy recovers, new supplies will be needed to meet a new wave of energy demands. However, if China is the only major investor in the field, it may reduce the market competitiveness.
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