Norwegian guarantees to Brazilian oil giant Petrobras could prove valuable for Norwegian supplier industry.

In June, Brazil’s oil company Petrobras received guarantees from GIEK, the Norwegian Export Credit Guarantee Agency, for a total amount of USD 500 million. The guarantees, covering loans from a number of international banks, will finance services from Norwegian offshore support vessel companies operating on behalf of Petrobras in Brazil.

The guarantees amount to 50 percent of a guarantee credit frame for USD 1 billion issued to Petrobras by GIEK, on behalf of the Norwegian State, covering purchases of Norwegian goods and services up until December 2020. The remaining USD 500m of the guarantee credit, may still be used to finance new exports from Norwegian suppliers.

“The intention with the credit frame, is to offer Petrobras good incentives to extend its relationship with Norwegian suppliers. A guarantee from the Norwegian state has the highest possible credit rating (AAA) and may provide the company with increased capacity. We are working on similar credit frames with other oil and gas operators using Norwegian suppliers. In addition to Petrobras, Italy-based Saipem has used a GIEK credit frame to finance substantial purchases from Norway,” says Wenche Nistad, CEO of GIEK.

A credit frame with GIEK encourages foreign companies to use Norwegian suppliers and helps secure financing for their purchases. GIEK does not provide funding, but offers guarantees to reduce the lenders’ default risk.

This is the second credit frame issued to Petrobras.