Money Morning first reported in January, that China was building stakes in some of the world’s largest natural-resource companies, which have been made vulnerable by depressed commodities prices, tumbling profits and falling stock prices. In the scant few weeks since that Money Morning report was published, Aluminum Corp. of China Ltd. (ADR: ACH), or Chinalco, has invested $19.5 billion in Australian/British mining giant Rio Tinto PLC (ADR: RTP), and China Minmetals Corp. acquired Australian zinc miner Oz Minerals Ltd.

China Development Bank has been particularly active. Earlier this week, the bank lent $15 billion to OAO Rosneft Oil Co., Russia’s state-owned oil company, and $10 billion to the Russian state pipeline monopoly Transneft (PINK: TRNFF). In return for the needed financing, Russia agreed to supply China with 15 million tons of oil annually for 20 years.

China Development Bank struck a similar deal with Petrobras Friday, agreeing to loan the Latin American energy giant $10 billion to help finance deepwater oil exploration off the coast of Brazil.

Oil exploration will be carried out with the participation of Sinopec (ADR: SHI), the Chinese state oil company, the Macauhub reported.

The contract will be finalized within the next two months so it can be signed when Brazilian President Luiz Inácio Lula da Silva visits China in May, according to Petrobras Chief Executive Officer Sergio Gabrielli.

In addition to the exploration partnership, the deal signed between Petrobras and Sinopec includes the supply of 60,000 to 100,000 barrels of oil per day in the current year. Petrobras also signed a memorandum of understanding with state company China National Petroleum Corporation (CNPC) for the supply of 40,000 to 60,000 barrels per day.

Brazil is necessarily the country that comes to mind when taking inventory of the world’s top oil producers. It currently has about 12 billion barrels of proven reserves, but that figure could grow substantially now that a number of very rich deposits have been found off Brazil’s shores.

Petrobras happened across the second-largest oil find in two decades last year when it found between 5 billion and 8 billion barrels of untapped light oil in the Tupi basin. Even more impressive are the unofficial figures from a new reservoir, known as Carioca. That field could hold 33 billion barrels of oil and gas, which would make it the world’s largest discovery in at least 32 years.

With discoveries like these Brazil, currently ranked 13th on the list of the world’s top oil producers could, could easily move into the top ten.

The only problem with the Tupi and Caricoa oil fields is production costs. The Carioca discovery, for instance, is located 170 miles offshore, more than 6,000 feet under the surface of the water, and is trapped beneath a shelf of salt 500 miles long and 125 miles wide.

Developing oil fields such as these will be very costly and with crude oil trading below $40 a barrel financing is imperative. In that sense China couldn’t have timed its investment in Petrobras any better.

Petrobras said it plans to invest $174.4 billion from 2009 through 2013, compared with the $112.4 billion planned for investment for 2008-12. The company will invest $28.6 billion in 2009 alone.

In 2008, trade between China and Brazil totaled $36 billion making China Brazil’s second largest trading partner.

Source: China Continues its Commodities Binge with Brazilian Oil Deal

The investment, which will be made through the group’s Sumitomo Mitsui Banking Corp. unit, underscores an evolving trend among large Japanese banks that have so far been unaffected by the subprime collapse.

Sumitomo Mitsui, Japan’s second largest bank, has not confirmed the agreement, but its 100 billion yen investment will secure an approximate 2.3% stake in Barclays. Barclays was racked by the housing collapse that started last year and has since dragged the U.S. economy to near recession. Barclays’ stock dropped 40% so far this year, as the bank took $3.35 billion in write-downs.

Last week, Barclays said it would seek out $7.8 billion in fresh capital from sovereign wealth funds, in a fresh share offering. Singapore’s Temasek Holdings, China Development Bank, and the Qatar Investment Authority are among the sovereign wealth funds reported to be interested in Barclays.

“This fixes the problem quite neatly for them,” Mike Trippitt, a banking analyst at Oriel Securities told The Independent. “They are signalling that at the moment there don’t seem to be any further writedowns. If you have got sovereign wealth funds buying in with a medium-term view you might argue that it signals some visibility.”

Barclay’s ratio of Tier 1 capital, a measure of financial strength, was at 5.1% at the end of 2007. Raising $8 billion would lift it to nearly 6%, analysts said.

Banks and securities firms have raised about $303 billion in the past year after almost $400 billion of write-downs and credit losses caused by the collapse of the U.S. subprime mortgage market, according to Bloomberg data.

Sumitomo Mitsui would be the second major Japanese bank to participate in the rescue effort of a Western financial institution struggling to emerge from the subprime crisis.

“This indicates that Japanese banks are in a safer position than their global peers and have surplus capital to invest,” Masafumi Oshiden, a Tokyo-based fund manager at BlackRock Inc. (BLK), told Bloomberg. “It’s a good move for them and I’d like to see them being even more aggressive.”

In January, Mizuho Financial Group pumped $1.2 billion into Merrill Lynch & Co. Inc. (MER) through the purchase of preferred shares. And many analysts believe there is more investment to come as Japanese banks, which find themselves in a relatively strong position, become more assertive with their overseas acquisitions.

“Under these circumstances I think that Japanese financial institutions are in a position to take an aggressive attitude… it is a change that should be very much welcomed,” Yoshimi Watanabe, Japan’s financial services minister, told the Times Online.

Source: Barclays Gets a $927 Million Jump Start as Japanese Banks Ramp up Overseas Investment