China Stakes Its Claim in Latin American Energy:

CNPC made its first investment overseas and its first in Latin America in 1993, according to the company. That year, CNPC won the tender to develop a block of Peru’s Talara oilfield, a marginal field that had been in production for over 100 years, with most of its wells shut-in. Successful with its first effort, CNPC developed another block in Peru, later moving on to make multi-billion- dollar investments and loans for oil projects throughout Latin America, principally South America. Aside from CNPC, three other giant, government-owned energy companies are also operating in LAC: China National Offshore Oil Corp. (CNOOC), China Petroleum and Chemical Corp. (SINOPEC) and SINOCHEM, which works in chemicals, fertilizer and oil. BRAZIL: China’s investments to date in Brazil have reached $38.9 billion, or 80.5% of the total invested in LAC oil projects. The CBD negotiates with Brazilian SOEs – especially Petrobras (Petróleo Brasileiro S.A.) – seeking to align its loans with the Brazilian government’s economic priorities, such as supporting domestic industries working in the oil patch and building local supply chains for the oil industry.

guarantee debt repayment. In 2009, China signed a $10 billion, long-term, loan-for-oil program with Brazil’s Petrobras to guarantee a supply of 200,000 barrels per day (b/d) of crude. Since then, Petrobras has worked out other agreements, such as the pre-payment of some multi-billion-dollar loans with the CDB, freeing it from the obligation of a preferential supply obligation covering 100,000 b/d of oil equivalent. 40 Brazil currently is the leading Latin American supplier of crude to China, followed by Colombia and Venezuela. In 2019, Brazil shipped 803,000 b/d to China, Colombia 262,000 b/d and Venezuela 228,000 b/d, according to the U.S. Energy Information Administration (EIA). China in 2019 imported an average of 10.1 million b/d of crude, up about 9% from 2018, the EIA reported. China has invested in a wide range of Brazilian oil and gas exploration projects, as well as joint ventures in pipeline construction and oil production infrastructure. 41 For example, CNPC and CNOOC are part of a world-class oil project in Brazil. Each holds a 10% share in the consortium that is developing Libra, the super-giant, deep water, pre-salt oil field estimated to hold between 8-12 billion barrels of recoverable reserves.

China uses loan-for-oil arrangements in oil-producing nations, betting that countries’ oil production will

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