China's CNOOC Eying Role in Brazil's Subsalt Oil Play

Dow Jones Newswires

RIO DE JANEIRO (Dow Jones Newswires), OCtober 22, 2008

China National Offshore Oil Corp. expects to reach a joint-venture deal with Brazil's Petroleo Brasileiro to aid in developing the country's promising subsalt oil and gas deposits, CNOOC's chief executive told the Estado de Sao Paulo newspaper.

In a story published Wednesday, Fu Chengyu said his company and Petrobras, as the Brazilian oil giant is known, were in talks, with Petrobras officials expected to travel to Beijing in November to further discuss the deal.

"In a short time, you will see great cooperation and joint venture between CNOOC and Petrobras," Fu said. "We are determined to make a large investment in Brazil and we want to talk about this in detail with the Brazilian government."

According to Fu, CNOOC wants to take advantage of the global credit crunch by funding projects and securing a spot in key markets.

"We are going to take advantage of the problems that exist in other markets at this moment to get stronger, and this includes the Brazilian coast - where we have a lot of interest," Fu said. "We have the technology for this and we have the capacity to furnish what Brazil needs."

While the executive declined to put a value on CNOOC's possible investments in Brazil, he did say it would be extensive.

"It will be billions, this I can guarantee you. The project is a priority for us. The total value of resources will be determined when the plan is completed," Fu said. "I expect that it will be ready in the next year."  

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