Petrobras has announced plans to establish a Chinese subsidiary. This move, according to Chief Executive Jean-Paul Prates, aims to rejuvenate relations with China, which had cooled during the tenure of former Brazilian President Jair Bolsonaro.
Petrobras intends to launch its Chinese subsidiary next year, contingent upon formal approval.
Jean-Paul Prates emphasized the strategic importance of this endeavour, stating during a phone interview with Reuters, “It’s important to them. It is an interesting signal, saying that in the same way that we have a Petrobras America, we will have a Petrobras China because both countries are equally important to us.
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This move has not occurred in isolation but within the context of shifting global dynamics. As China and the United States engage in a multifaceted struggle for influence worldwide, President Lula has pursued a nuanced and balanced approach, advocating for friendly relations with both superpowers. His diplomatic efforts have included visits to both the White House and Beijing since assuming office earlier this year.
Petrobras’ forthcoming Chinese subsidiary is expected to offer the company expanded operational capabilities, enabling participation in projects and partnerships not only in China but also in other countries, including those in Africa. This opens up exciting avenues for collaboration that could extend beyond energy into diverse sectors such as oil refining, fertiliser production, and even the revival of Brazil’s naval industry.
One of the most significant implications of this strategic shift is the impact it could have on Brazil’s relations with the United States. As Petrobras deepens its ties with China, a nation often seen as a competitor to the U.S. on the global stage, it may raise eyebrows in Washington. Brazil, historically a key U.S. ally in the region, may find itself navigating a delicate balance between its newfound Chinese partnership and its enduring transatlantic ties. Of worthy note, is the fact that the Latin American nation and China ditched trading in US dollars back in March. The deal saw China, considered the top rival to US economic hegemony, and Brazil conducting trade and financial transactions directly, exchanging yuan for reais and vice versa. The Brazilian Trade and Investment Promotion Agency (ApexBrasil) said in a statement, “The expectation is that this will reduce costs… promote even greater bilateral trade and facilitate investment.”
China booted out the US and became Brazil’s largest trading partner in 2009, with a record US$150.5 billion (R$200 billion) in bilateral trade last year. China is also Brazil’s largest export market, accounting for more than a third of all exports.
Petrobras is setting ambitious goals, aiming to increase its share of China’s oil imports from the current 5% to an impressive 15% within the next 10 to 20 years. This aspiration is already manifesting through recent partnerships with prominent Chinese companies like CNOOC and Sinopec, alongside discussions about potential joint projects with CITIC Construction and major Chinese financial institutions, including the China Development Bank and Bank of China.
