Petrobras has received a US$500mn buyer’s credit facility from JP Morgan, for the purchase of equipment manufactured by a UK subsidiary of GE Oil & Gas.
Subsea and surface oil gas pipelines will be exported by Newcastle-based Wellstream International, and as such the deal is 100% covered by UK Export Finance (UKEF).
The loan has a 10-year tenor, excluding a one-year grace period. It forms part of a memorandum of understanding signed between Petrobras and four export credit agencies, including Italy’s Sace, UKEF, Japan’s NEXI and Austria’s Oesterreichische Kontrollbank (OeKB), last September.
At the time, the UK Minister of State for Trade and Investment, Lord Francis Maude, announced that UKEF was close to finalising its support for the US$500mn deal.
The deal comes in the midst of turbulent times for Petrobras, which is battling a major corruption case in Brazil, and whose credit-worthiness has been downgraded two levels to BB by Standards & Poor’s. UKEF tells GTR that the anti-bribery due diligence it carried out ahead of the deal indicated that “Petrobras has taken significant steps to reform its senior managerial and compliance structures, and that individuals found to have been involved in bribery have been replaced”, making it possible to provide support to the oil giant.
JP Morgan would not comment on how the corruption scandal affected the deal.