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The Japan Bank for International Cooperation (JBIC) has signed a loan agreement totalling US$210mn for the Espadarte FPSO project in Brazil.

The loan is co-financed with Mizuho Corporate Bank (mandated lead arranger), ING Bank, Tokyo branch, Bank of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui Banking Corporation (SMBC) and Citibank, Tokyo branch.

JBIC will provide Brazil’s political risk guarantee for the portion co-financed by private financial institutions. This is the first loan that JBIC has extended in project financing for a project in Brazil.

Espadarte MV 14 BV, where Modec, Mitsubishi Corporation, and Mitsui & Co have equity interests, will offer FPSO (with a production capacity of 100,000 barrels per day and a storage capacity of 1.6mn barrels) to the Espadarte Sul oilfield located 80-100km offshore of Campos in the state of Rio de Janeiro. 

Modec will provide FPSO for eight years based on the charter contract with Petrobras, Brazil’s state-owned oil company, to produce, process, store and offload crude oil. Modec Servicos de Petrleo do Brasil (Modec do Brazil), a subsidiary of Modec, will operate and maintain FPSO.

JBIC is supporting the efforts of Japanese firms to develop overseas business through this project. This is the first FPSO project undertaken for Petrobras by Modec – a leading company in the FPSO industry. Other participating Japanese firms are also seeking to strengthen their ties with Petrobras in order to expand their business into joint resource development projects.

The Brazilian government has set the target of becoming a net exporter of oil and oil products by 2006 through increased oil production. Based on this government target, Petrobras is aiming to produce 2.3mn barrels of oil per day in 2010. The Espadarte FPSO project will play an important role in achieving this target. JBIC will continue to cooperate with Brazil in its infrastructure development, export promotion, and energy-related projects, while supporting the projects that will aid the overseas business development of Japanese firms.