China Development Bank, Petrobras in loan talks

SANYA, China, April 14, 2011 (AFP) - China Development Bank said Thursday it was in talks with Petrobras to extend more credit to the Brazilian oil giant after the two firms signed a $10-billion loan agreement in 2009.

"Both sides have expressed their intent and interest in furthering their cooperation and we are in discussions for the next step of cooperation," Chen Yuan, chairman of China Development Bank, told reporters.

"But we haven't discussed how much or the form of the loans at this stage," Chen said on the sidelines of a BRICS summit involving the world's major emerging economies on China's southern Hainan island.

Russian President Dmitry Medvedev, Chinese President Hu Jintao, Brazil's Dilma Rousseff, South Africa's Jacob Zuma and Indian Prime Minister Manmohan Singh all met for the talks on Thursday.

The summit saw the BRICS' state development banks, including China Development Bank, agree to open credit lines in their national currencies, which would reduce their reliance on the dollar.

Petrobras signed a loan agreement with China Development Bank in May 2009 to help it finance upcoming investments.

At the time, Petrobras also signed a long-term agreement with a subsidiary of China's giant oil refiner Sinopec for the export of crude oil.

The loan was not tied to either the oil supply deal or any other subsequent cooperation between Petrobras and Chinese refiners.

China Development Bank said it has extended $141 billion in loans, much of which has gone to other countries, reflecting Beijing's efforts to forge stronger ties with developing nations as it winds back its dependence on Western export markets.

Some of the loans have been denominated in yuan as China tries to increase the use of its currency worldwide.

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