As most Fools who follow energy closely know well, Brazil's Petroleo Brasileiro (NYSE:PBR) -- or Petrobras -- has of late hit the deepwater crude oil mother lode. Several promising big finds have been uncovered at depths of thousands of feet beneath the sea's surface and under encrusted salt deposits.

The challenge for the Brazilian government now is to produce the newly discovered crude in an atmosphere of depressed oil prices. The government has apparently approached countries with excess cash, and it appears negotiations have advanced the furthest with China, which has a growing need for oil, along with other commodities, including iron ore and soybeans, that are now abundant in Brazil. The agreement with China, if finalized, may provide up to $10 billion in financing for Petrobras.

And so it appears to be ideal that, on the one hand, amid a worldwide decline in spending by oil companies, Brazil intends to increase its energy spending by about half (to a total of about $174 billion), with about $28 billion going to deepwater projects over the next several years. And on the other hand, China, despite its own economic slowdown, continues to have both a voracious need for resources and $2 trillion in foreign exchange reserves to use to get them.

In addition to whatever agreement might come from the months-long conversations between the two countries, China Petroleum & Chemical (NYSE:SNP) also appears to have signed a separate pact for the daily supply of 60,000 to 100,0000 barrels of heavy crude from Brazil, or about 5% of Petrobras' total current output.

Brazil President Luiz Inacio Lula da Silva plans to visit China in May. It's entirely possible that a preliminary agreement between the two nations could be forged at that time. In the meantime, U.S.-based companies such as Transocean (NYSE:RIG), along with ExxonMobil (NYSE:XOM) and Diamond Offshore (NYSE:DO), are working to uncover additional discoveries in the deep waters off the South American country.

All this only serves to increase my interest in Petrobras. Goodness only knows how much crude lies off Brazil's coast; current estimates say in excess of 30 billion barrels. I'm convinced that, before we know it, our world will again be thirsty for black gold. With funding to back its production efforts, Petrobras could easily slip into the catbird's seat.

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Fool contributor David Lee Smith doesn't own shares in any of the companies mentioned above. He does, however, welcome your questions or comments. The Fool has a disclosure policy.